ODOT ODOT Errors & Omissions Errors & Omissions Policy Policy ODOT/ACEC Conference Presentation ODOT/ACEC Conference Presentation April 17, 2007 April 17, 2007 Cathy Nelson, ODOT Cathy Nelson, ODOT
Mar 27, 2015
ODOTODOTErrors & OmissionsErrors & Omissions
PolicyPolicy
ODOT/ACEC Conference PresentationODOT/ACEC Conference PresentationApril 17, 2007April 17, 2007
Cathy Nelson, ODOT Cathy Nelson, ODOT
AGENDAAGENDA
• Recap - Professional Engineering Accountability
• E&O Policy– Purpose– Key Elements
• Next Steps– Policy Review– Implementation
What is Professional Engineering What is Professional Engineering Accountability? 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
Professional Engineering Professional Engineering AccountabilityAccountability -- --
ODOT’s Programmatic ApproachODOT’s Programmatic Approach
• Engineering Policies & Procedures• Training• Deviation Policy• Design Quality Program• Consequences for failure to comply
Performance Accountability Performance Accountability Consequences…Consequences…
Regulator ODOT StaffEngineers
Private SectorConsultants
OSBEELS Individual Engineer Accountable to OregonProfessional Practice Law
Revoke license & assess civil penaltiesOwnerODOT
Individual Engineer -Performance Mgmt.
Discipline
Individual Firm – Errors & Omissions
Cost RecoveryPublic Individual Engineer &
ODOT covered byOregon Tort Claims Act
Firm covered by General& Professional LiabilityInsurance
Draft E&O PolicyDraft E&O Policy
Applies To:
• ODOT A&E contracts
• ODOT Construction Contracts– Using Consultant prepared construction
plans and specifications– Consultant Construction Engineering and
Inspection– Consultant Contract Administration
Policy PurposePolicy 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
Key Policy ElementsKey Policy Elements
Contract Language Requirements
• Indemnity• Insurance• Standard of Care• E&O Claims Process
Standard of Care DefinitionStandard 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”
• Shared Understanding and Delivery of Appropriate Standard of Care
– Technical Competency– Appropriate care and professional judgement– Industry Standard of Practice– Site conditions
Negligent Perfect
E&O Claims Process -- GoalsE&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
Claims Process -- Key Claims Process -- Key ElementsElements• Work issues at project level
– raise issues early– work collaboratively– track costs
• Escalate when necessary
Escalation ProcessEscalation 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
Escalation ProcessEscalation 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
Premium CostsPremium 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
Cost EvaluationCost 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….
Cost Recovery NegotiationsCost 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
Next StepsNext 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