Public contracts: claims.

Existing law authorizes a public entity to compromise or otherwise settle any 3rd-party claim relating to a public works contract. This bill would define "claim" for those purposes to mean a written demand or assertion by a contractor, a local agency, including a charter city, except as specified, or charter county with respect to the contract documents, as specified. This bill would, for contracts entered into on or after January 1, 2010, provide for a mediation process for claim disputes over $50,000 between a contractor and a local agency, including a charter city, except as specified, or charter county that does not have an alternative dispute process, if those claims remain unresolved after a specified time period. By requiring local agencies, charter cities, and charter counties to incorporate this mediation process in specified claim disputes, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.