(a) Following receipt of a contractor's notice of claim, the
chief administrative officer of the commission or other designated representative
shall review the contractor's claim(s) and the commission's counterclaim(s),
if any, and initiate negotiations with the contractor to attempt to resolve
the claim(s) and counterclaim(s).
(b) Subject to subsection (c) of this section, the parties
shall begin negotiations within a reasonable period of time, not to exceed
60 days following the later of:
  (1) the date of termination of the contract;
  (2) the completion date, or substantial completion date in
the case of construction projects, in the original contract; or
  (3) the date the commission receives the contractor's notice
of claim.
(c) The commission may delay negotiations until after the 180th
day after the date of the event giving rise to the claim of breach of contract
by:
  (1) delivering written notice to the contractor that the commencement
of negotiations will be delayed; and
  (2) delivering written notice to the contractor when the commission
is ready to begin negotiations.
(d) The parties may conduct negotiations according to an agreed
schedule as long as they begin negotiations no later than the deadlines set
forth in subsections (b) or (c) of this section, whichever is applicable.

(e) Subject to subsection (f) of this section, the parties
shall complete the negotiations that are required by this chapter as a prerequisite
to a contractor's request for contested case hearing no later than 270 days
after the commission receives the contractor's notice of claim.
(f) The parties may agree in writing to extend the time for
negotiations on or before the 270th day after the commission 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 date certain.
The parties may enter into a series of written extension agreements that comply
with the requirements of this section.
(g) The contractor may request a contested case hearing before
the State Office of Administrative Hearings (SOAH) pursuant to §27.99
of this title (relating to Request for Contested Case Hearing) after the 270th
day after the commission receives the contractor's notice of claim, or the
expiration of any extension agreed to under subsection (f) of this section.

(h) The parties may agree to mediate the dispute at any time
before the 270th day after the commission receives the contractor's notice
of claim or before the expiration of any extension agreed to by the parties
pursuant to subsection (f) of this section. The mediation shall be governed
by Division 3 of this subchapter (relating to Mediation of Contract Disputes).

(i) Nothing in this section is intended to prevent the parties
from agreeing to commence negotiations earlier than the deadlines established
in subsections (b) and (c) of this section, or from continuing or resuming
negotiations after the contractor requests a contested case hearing before
SOAH.


Source Note: The provisions of this §27.89 adopted to be effective February 22, 2001, 26 TexReg 1493