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Regular Session, 2010
SENATE BILL NO. 438
BY SENATOR APPEL
PUBLIC CONTRACTS. Provides for dispute resolution of public contracts with the office
of facility planning and control of the division of administration. (8/15/10)
AN ACT1
To amend and reenact R.S. 38:2217 and to enact R.S. 38:2217.1, relative to contracts; to2
provide for independent arbitration and dispute resolution of public contracts with3
the office of facility planning and control of the division of administration; provides4
for the procedure to create the dispute resolution board; provides for qualifications5
for members of dispute resolution board; provides for compensation for the services6
of dispute resolution board; provides for the rules utilized by the dispute resolution;7
and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 38:2217 is hereby amended and reenacted and R.S. 38:2217.1 is10
enacted to read as follows: 11
§2217. Independent arbitration; judicial review; evidence 12
In all public building, construction or other contracts which do not provide13
the right to independent arbitration with both parties having equal authority in14
selection of the arbitrator or arbitrators or which, in the case of public contracts15
with the office of facility planning and control of the division of administration,16
do not cite and identify R.S. 38:2217.1 as the dispute resolution procedure for17 SB NO. 438
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the contract, the right of each party to such contract to judicial review of and redress1
for any action, determination or interpretation made under or with respect to such2
contract shall not be denied. In any such judicial action, no prior nonjudicial3
decision, determination or interpretation shall have any binding or conclusive or4
presumptive effect, nor shall there be any limitation upon the evidence which may5
be introduced in such action except the limitations arising out of the application of6
the rules of evidence applicable in courts of this state. The provisions of this Section7
may not be waived.8
§2217.1. Dispute resolution of public contracts with the office of facility9
planning and control of the division of administration10
A.(1) This Section shall only be applicable to public contracts with the11
office of facility planning and control of the division of administration.12
(2) In order for this Section to be applicable, it must be specifically cited13
and identified in the contract documents as the dispute resolution procedure for14
the contract. If this Section is specifically cited and identified in the contract15
documents as the dispute resolution procedure for the contract, then the16
following provisions of this Section shall apply.17
B. Notwithstanding any other provision of the contract documents which18
may be in conflict or to the contrary, any and all unresolved claims,19
counterclaims, or disputes of any nature or kind whatsoever arising from or in20
any way connected with the project or contract between the office of facility21
planning and control of the division of administration, hereafter referred to as22
the "office," and the contractor shall be resolved and decided by binding23
arbitration in accordance with Chapter 2 of Code Title XIX of Code Book 1 of24
Title 9 of the Louisiana Revised Statutes of 1950 (R.S. 9:4201, et. seq.), and in25
accordance with the provisions of this Section.26
C. The office and the contractor shall have the right to independent27
arbitration with both parties having equal authority in the selection of the28
dispute resolution board arbitrators, in the manner provided for in the29 SB NO. 438
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following procedure:1
(1) Within fifteen days after award of contract, but prior to signing the2
contract, the office and the contractor shall each appoint one individual person3
to serve as an arbitrator and give written notice of such appointment to the4
other. Within five working days after such notices have been given, the two5
arbitrators so selected shall select a neutral arbitrator who is an attorney6
licensed to practice in the state of Louisiana and give notice of the selection to7
the office and the contractor. The three arbitrators selected shall compose the8
dispute resolution board, with the selected neutral arbitrator to serve as the9
dispute resolution board chair.10
(2)(a)(i) In order to qualify as an arbitrator, a person selected may not11
be an officer, director, partner, or a direct employee of the office or the12
contractor, or any person, or officer, director, partner, or a direct employee of13
any entity, performing any work or providing any services, supplies or14
equipment in any way connected with the project.15
(ii) In addition, the person shall not be prohibited from being an16
arbitrator under the terms of Civil Code Article 3107.17
(b) Compensation for the services of the dispute resolution board shall18
be paid by the nonprevailing party and assessed as part of any arbitration19
award at the rate of three hundred dollars per hour, plus expenses for each20
member of the dispute resolution board, or as mutually agreed by the office and21
the contractor.22
(3) The dispute resolution board shall utilize the Construction Industry23
Arbitration Rules Fast Track Procedures as promulgated by the American24
Arbitration Association current as of the date the dispute resolution board chair25
receives notice of a request to submit a claim to the dispute resolution board for26
arbitration.27
D.(1) The contractor shall include and incorporate by reference into all28
contracts, subcontracts, and purchase orders made in connection with the29 SB NO. 438
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project the terms and conditions of this Section, and shall bind all1
subcontractors to the same arbitration process utilizing the same dispute2
resolution board as provided for in this Section.3
(2) The dispute resolution selected for the project shall decide by binding4
arbitration all claims between all persons or entities performing any work, or5
providing any labor, materials, equipment or supplies for the project including,6
but not limited to, claims among or between subcontractors at any tier.7
(3) If this Section is specifically cited and identified in the contract8
documents as the dispute resolution procedure for the contract, then the office9
and the contractor and all persons whose contracts incorporate the terms and10
conditions of this Section, shall waive any and all claims of any nature or kind11
against the dispute resolution board members; shall hold harmless, save,12
indemnity and defend the dispute resolution board members from and against13
any claim of liability arising out of or in any way connected with the project or14
services rendered by the dispute resolution board members; and shall not15
subpoena the testimony or records of the dispute resolution board or its16
members for any reason.17
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Christopher D. Adams.
DIGEST
Proposed law provides for dispute resolution of public contracts with the office of facility
planning and control of the division of administration.
Proposed law will only be applicable for public contracts with the office of facility planning
and control of the division of administration.
Proposed law establishes the procedure to create the dispute resolution board:
1) the office of facility planning and control of the division of administration selects an
arbitrator;
2) the contractor selects an arbitrator; and
3) the two arbitrators then select a neutral arbitrator, who will serve as chairman of the
dispute resolution board. SB NO. 438
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words in boldface type and underscored are additions.
Proposed law establishes qualifications for arbitrators of the dispute resolution board:
1) arbitrator cannot be an officer, director, partner, or a direct employee of the office
of facility planning and control of the division of administration or the contractor,
or any person, officer, director, partner, or a direct employee of any entity
performing any work or providing any services connected with the project;
2) arbitrator cannot be prohibited under the terms of Civil Code Article 3107; and
3) neutral arbitrator must be an attorney licensed to practice in the state of Louisiana.
Proposed law establishes that compensation for the services of the dispute resolution board
will be paid by the non-prevailing party and assessed as part of any arbitration award at the
rate of $300 per hour, plus expenses for each member of the dispute resolution board, or as
mutually agreed by the office of facility planning and control of the division of
administration and the contractor.
Proposed law establishes that the dispute resolution board will utilize the Construction
Industry Arbitration Rules Fast Track Procedures as promulgated by the American
Arbitration Association current as of the date the dispute resolution board chairman receives
notice of a request to submit a claim to the dispute resolution board for arbitration.
Proposed law establishes the requirement of the contractor to include and incorporate a
reference of the proposed law in all contracts, subcontracts and purchase orders made in
connection with the project.
Proposed law protects the arbitrators and the dispute resolution board from legal liability for
services rendered in connection with the matter heard before the dispute resolution board.
Effective on August 15, 2010.
(Amends R.S. 38:2217; adds R.S. 38:2217.1)