Financial Services Bulletin No. 99/00-07
 

October 18, 1999
 

MEMORANDUM

TO:                     Executive Committee, Department Chairpersons, Directors, and
                           Administrative Heads

FROM:              Wayne E. Reed
                           Director of Purchasing

SUBJECT:        Update Regarding Dispute Resolution Clause per House Bill 826, 76th Texas Legislature

 

During the interim since Financial Services Bulletin No. 3 was issued, on September 1, 1999, the Office of General Council for The University of Texas System, has developed both a long version and a short version of the dispute resolution clause, as a result of House Bill 826, 76th Texas Legislature. (See Attachment A - Dispute Resolution Notice: Short Form and Attachment B - Dispute Resolution Notice: Long Form.) In accordance with the recent revisions from the Office of General Counsel, the long version is to be included in all contracts totaling $25,000 and above. The short version is to be utilized for all purchase orders, and contracts totaling less than $25,000.

As a result of actions of the 76th Texas Legislature, effective August 30, 1999, all contracts entered into by a state agency (including UTHSCSA) for goods, services, or projects will be required to include a provision/clause stating that the parties to the contract will use the dispute resolution process provided in Chapter 2260, Government Code. The term project is defined by Section 2166.001, Government Code, as "building construction projects financed wholly or partly by a specific appropriation, a bond issue, or federal money, to include the construction of: (i) a building, structure, or appurtenant facility or utility, including the acquisition and installation of original equipment and original furnishings; and (ii) an addition to, or alteration, rehabilitation, or repair of, an existing building, structure, or appurtenant facility or utility."

Although the Purchasing Office is working to assure that contracts and purchase orders administered through the Purchasing Office will include the appropriate dispute resolution clause, individuals or departments utilizing contracts which are not administered through the Purchasing Office will be responsible for assuring that such contracts include one of the attached clauses, as applicable.

Thank you for your cooperation and assistance with these matters.

Attachment A

Dispute Resolution Notice: Short Form

(for Purchase Orders and Contracts Under $25,000)
 

To the extent that Chapter 2260, Texas Government Code, is applicable to this Contract and is not preempted by other applicable law, the dispute resolution process provided for in Chapter 2260 and the related rules adopted by the Texas Attorney General pursuant to Chapter 2260, shall be used by The University of Texas Health Science Center at San Antonio (UTHSCSA) and Contractor to attempt to resolve any claim for breach of contract made by Contractor that cannot be resolved in the ordinary course of business. The Chief Business Officer of UTHSCSA shall examine Contractor's claim and any counterclaim and negotiate with Contractor in an effort to resolve such claims. The parties hereto specifically agree that (i) neither the occurrence of an event giving rise to a breach of contract claim nor the pendency of a claim constitute grounds for the suspension of performance by Contractor; (ii) neither the issuance of this Contract by UTHSCSA nor any other conduct, action or inaction of any representative of UTHSCSA relating to this Contract constitutes or is intended to constitute a waiver of UTHSCSA's or the state's sovereign immunity to suit; and (iii) UTHSCSA has not waived its right to seek redress in the courts.

Attachment B

Dispute Resolution Notice: Long Form

(for Contracts Totaling $25,000 and Above)
 


(1) To the extent that chapter 2260 of the Texas Government Code, as it may be amended from time to time ("Chapter 2260"), is applicable to this Contract and is not preempted by other applicable law, the dispute resolution process provided for in Chapter 2260 shall be used, as further described herein, by The University of Texas Health Science Center at San Antonio (UTHSCSA) and Contractor to attempt to resolve any claim for breach of contract made by Contractor:

(A) Contractor's claims for breach of this Contract that the parties cannot resolve pursuant to other provisions of this Contract or in the ordinary course of business shall be submitted to the negotiation process provided in subchapter B of Chapter 2260. To initiate the process, Contractor shall submit written notice, as required by subchapter B of Chapter 2260, to UTHSCSA in accordance with the notice provisions in this Contract. Contractor's notice shall specifically state that the provisions of subchapter B Chapter 2260 are being invoked, the date and nature of the event giving rise to the claim, the specific contract provision that UTHSCSA allegedly breached, the amount of damages Contractor seeks, and the method used to calculate the damages. Compliance by Contractor with subchapter B of Chapter 2260 is a required prerequisite to Contractor's filing of a contested case proceeding under subchapter C of Chapter 2260. The Chief Business Officer of UTHSCSA, or such other officer of UTHSCSA as may be designated from time to time by UTHSCSA by written notice thereof to Contractor in accordance with the notice provisions in this Contract, shall examine Contractor's claim and any counterclaim and negotiate with Contractor in an effort to resolve such claims.

(B) If the parties are unable to resolve their disputes under subparagraph (A) of this section, the contested case process provided in subchapter C of Chapter 2260 is Contractor's sole and exclusive process for seeking a remedy for any and all of Contractor's claims for breach of this Contract by UTHSCSA.

(C) Compliance with the contested case process provided in subchapter C of Chapter 2260 is a required prerequisite to seeking consent to sue from the Legislature under Chapter 107 of the Texas Civil Practices and Remedies Code. The parties hereto specifically agree that (i) neither the execution of this Contract by UTHSCSA nor any other conduct, action or inaction of any representative of UTHSCSA relating to this Contract constitutes or is intended to constitute a waiver of UTHSCSA's or the state's sovereign immunity to suit and (ii) UTHSCSA has not waived its right to seek redress in the courts.

(2) The submission, processing and resolution of Contractor's claim is governed by the published rules adopted by the Texas Attorney General pursuant to Chapter 2260, as currently effective, hereafter enacted or subsequently amended. These rules are found at [Texas Administrative Code citation, when available].

(3) Neither the occurrence of an event giving rise to a breach of contract claim nor the pendency of a claim constitute grounds for the suspension of performance by Contractor, in whole or in part. UTHSCSA and Contractor agree that any periods set forth in this Contract for notice and cure of defaults are not waived, delayed, or suspended by Chapter 2260 or this section.