Virginia Law

Article 1. Highway Construction Contracts, Limitations on Suits, and Adjustment of Claims.

A. Every contractor whose bid is accepted shall, before commencing work, enter into a contract with the Commissioner of Highways that shall fully set out the time when work shall commence and when the contract shall be completed as well as the time and manner for the payment for the work. Whenever the Commissioner of Highways or his designee publicly opens and announces all bids received for each invitation to bid, it shall be announced at the same time if the lowest read bid exceeds the maximum tolerance of the Department's estimate for the work represented by that bid.

B. The contract shall require that the contractor comply with all requirements, conditions, and terms of the contract, including environmental permits that are part of the contract. If the contractor violates a contract provision and the violation results in environmental damage or if the contractor violates environmental laws or environmental permits, the Department may suspend the contractor from future bidding or initiate debarment. In addition, the Department may recover either (i) the loss or damage that the Department suffers as a result of such violation or (ii) any liquidated damages established in such contract plus (iii) reasonable attorney fees and expert witness fees. Any damages and costs collected under this section shall be deposited into the Transportation Trust Fund and used for transportation purposes as determined by the Board.

Code 1950, § 33-105; 1958, c. 573; 1970, c. 322, § 33.1-191; 1999, c. 405; 2001, cc. 418, 432; 2002, c. 303; 2014, c. 805.

A. Upon the completion of any contract for the construction of any state highway project awarded by the Board or by the Commissioner of Highways to any contractor, if the contractor fails to receive such settlement as he claims to be entitled to under the contract for himself or for his subcontractors or for persons furnishing materials for the contract for costs and expenses caused by the acts or omissions of the Department, he may, within 60 days after the final estimate date, deliver to the Department, through proper administrative channels as determined by the Department, a written claim for such amount to which he deems himself, his subcontractors, or his material persons entitled under the contract. The final estimate date shall be set forth in a letter from the Department to the contractor sent by certified mail. The claim shall set forth the facts upon which the claim is based, provided that written notice of the contractor's intention to file such claim shall have been given to the Department at the time of the occurrence or beginning of the work upon which the claim and subsequent action is based. Within 90 days from receipt of such claim, the Department shall make an investigation and notify the claimant in writing by certified mail of its decision. The claimant and the Department may, however, mutually extend such 90-day period for another 30 days.

B. If dissatisfied with the decision, the claimant shall, within 30 days from receipt of the Department's decision, notify the Commissioner of Highways, in writing, that he desires to appear before him, either in person or through counsel, and present any additional facts and arguments in support of his claim as previously filed.

C. The Commissioner of Highways shall schedule such appearance to be held within 30 days of receiving the claimant's written request. The claimant and the Commissioner of Highways may, however, mutually agree to schedule such appearance to be held after 30 days but before 60 days from the receipt of the claimant's written request.

D. Within 45 days from the date of the appearance before him, the Commissioner of Highways shall make an investigation of the claim and notify the contractor in writing of his decision. The claimant and the Commissioner of Highways may, however, mutually agree to extend such 45-day period for another 30 days. If the Commissioner of Highways deems that all or any portion of a claim is valid, he shall have the authority to negotiate a settlement with the contractor, but any such settlement shall be subject to the provisions of § 2.2-514.

E. Failure of the Department or the Commissioner of Highways to render a decision within the time period specified in subsections A and D, or within such other period as has been mutually agreed upon as provided in this section, shall be deemed a denial of the claim.

If the Commissioner of Highways determines that a claim has been denied as the result of an administrative oversight, then the Department reserves the right to reconsider the claim.

1976, c. 230, § 33.1-386; 1982, c. 320; 1991, c. 691; 1994, c. 67; 2001, c. 175; 2007, c. 162; 2014, c. 805.

No suit or action shall be brought against the Department by a contractor or any persons claiming under him or on behalf of a subcontractor of the contractor or a person furnishing materials for the contract to the contractor on any contract executed pursuant to this article or by others on any claim arising from the performance of the contract by the contractor, subcontractor, or person furnishing materials to the contractor, unless the claimant has exhausted the review process provided by § 33.2-1101. Further, no such suit or action shall be brought unless such suit or action is brought within 12 months from receipt of the decision of the Commissioner of Highways. In no event shall any delay therein on the part of the contractor, subcontractor, or person furnishing materials be construed as a reason for extending the time within which such suit or action must be brought. In any case brought against the Department on behalf of a subcontractor or person furnishing materials to the contractor, lack of privity between the parties shall be no defense; however, any such case brought on behalf of a subcontractor or person furnishing materials to the contractor shall only be brought for costs and expenses caused by the acts or omissions of the Department and shall not be brought for costs and expenses caused by the contractor.

1976, c. 230, § 33.1-192.1; 1982, c. 647; 1991, c. 691; 2014, c. 805.

As to such portion of the claim as is denied by the Commissioner of Highways, the contractor may institute a civil action for such sum as he claims to be entitled to under the contract for himself or for his subcontractors or for persons furnishing materials for the contract by the filing of a petition in the Circuit Court of the City of Richmond or where the highway project that is the subject of the contract is located. Any civil action brought on behalf of a subcontractor or person furnishing materials for the contract shall only be brought for costs and expenses caused by the acts or omissions of the Department and shall not be brought for costs and expenses caused by the contractor. Trial shall be by the court without a jury. The submission of the claim to the Department within the time and as set out in § 33.2-1101 shall be a condition precedent to bringing an action under this article and the Department shall be allowed to assert any and all defenses in a case brought by or on behalf of the subcontractor or a person furnishing materials to the contractor which are available to the contractor.

1976, c. 230, § 33.1-387; 1982, c. 320; 1991, c. 691; 2014, c. 805.

The provisions of this article shall apply to all contracts executed and proceedings initiated after June 30, 1976, and may be made applicable to existing contracts by mutual consent of the contracting parties.

1976, c. 230, § 33.1-388; 1982, c. 320; 2014, c. 805.

The provisions of this article shall be deemed to enter into and form a part of every contract entered into between the Board and any contractor on or after July 1, 1976, and no provision in said contracts shall be valid that is in conflict herewith.

1976, c. 230, § 33.1-389; 2014, c. 805.