Minnesota Department of Transportation

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MnDOT Policies

Consultant Errors and Omissions Reporting and Resolution Procedures

For Consultant Errors and Omissions Policy #FM004

Revised: August 30, 2023

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Introduction

This document is the companion to the Minnesota Department of Transportation’s (MnDOT’s) Consultant Errors and Omissions Policy. It provides the procedures for reporting and resolving errors and omissions by consultants.

Definitions

Consultant

A person or business entity that performs architecture, engineering, or other design-related services under a contract with MnDOT, including a design-builder or design-build team that performs such services.

State’s Project Manager

The MnDOT architect or engineer responsible for managing the design of a project who is designated as the “State’s Project Manager” in section 6 of the Professional/Technical contract with the architect or engineer consultant and monitors the consultant’s performance and progress. This person may be the MnDOT Project Manager, a design lead, or a functional group lead if the consultant is hired to deliver a specific functional task. 

MnDOT Project Manager

The person who leads the project team and works with all stakeholders to define the project and to meet the project scope, schedule, and budget throughout all phases of the project, from project initiation to project closeout.

Error or Omission

A negligent or wrongful act in which a consultant fails to meet the applicable Standard of Care in the performance of its work under contract with the department or fails to meet a duty imposed by the contract.

Negligence

Conduct that falls below the standard of behavior established by law for the protection of others against unreasonable risk or harm, or failure to act in a manner consistent with the Standard of Care.

Resident Engineer

The MnDOT employee designated as “Resident Engineer” (or the Resident Engineer’s designee) and who is responsible for managing a construction project.

Standard of Care

In accordance with section 8.2 of the MnDOT Professional/Technical contract with the designer, the degree of care, knowledge, and skill ordinarily exercised by reputable professionals in the field under like circumstances in the State of Minnesota.

State Bridge Engineer

The Director of the Bridge Office, or the Director’s designee.

State Construction Engineer

The Director of the Office of Construction and Innovative Contracting, or the Director’s designee.

State Design Engineer

The Director of the Office of Project Management and Technical Support, or the Director’s designee.

Procedures

When MnDOT reasonably believes that a consultant has made an error or omission on a MnDOT project, MnDOT considers the nature, extent, and circumstances of the error or omission, the resulting damages (if any), the likelihood of recovering such damages, and the potential efficacy of other possible responsive actions.

MnDOT then determines whether to seek recovery of the damages from the consultant or take other appropriate action. Upon reaching a determination, the department takes steps to implement its plan. When MnDOT reasonably believes that such an error or omission has occurred, MnDOT will make reasonable efforts to notify the consultant of the problem and allow the consultant a reasonable involvement in efforts to mitigate possible damages. This involvement may range from an opportunity for input about potential responsive actions to identifying potential specific corrective action measures for field implementation.

Measures of Damages

MnDOT determines damages it believes are attributable to a consultant error or omission on a case-by-case basis. The measure of damages depends on whether the consultant error or omission was identified before or after a construction contract was let and awarded for the affected project. Damages should generally include the costs resulting from the error or omission, including any additional staff or consultant costs and any additional peer review costs.

There is no minimum or threshold of damages required to trigger efforts to recover such damages. However, the department should consider the cost of obtaining a recovery of damages when deciding whether to pursue such recovery.

Error or Omission in Final Design Documents Discovered Pre-Letting

In general, damages consist of the cost to correct the plans and to prepare and publish any addenda necessary to make the correction. This cost also includes any additional MnDOT staff time to manage the additional consultant work and to review additional submissions.

Error or Omission Discovered Post-Letting, but Pre-Award

In general, damages should reflect MnDOT’s costs to correct the plans. If the department elects to reject bids for the project and re-solicit bids, then the damages should also include any additional costs incurred by MnDOT to re-let the project. MnDOT’s damages may also include the cost of responding to and defending against bid protests and lawsuits brought by bidders challenging MnDOT’s decision to award or not award the construction contract. If MnDOT elects to proceed with award of the contract notwithstanding the error or omission, then the measure of damages covered in the following paragraph (Error or Omission Discovered Post-Letting, Post-Award) applies.

Error or Omission Discovered Post-Letting, Post-Award

In general, damages should reflect the premium costs of construction due to a design error or omission. These premium costs are the additional costs of construction that would not have been incurred by MnDOT had the consultant performed the work without making the error or omission.

Premium costs generally should not reflect additional project work that would have been included in the construction contractor’s price if the original deliverables were correct, particularly if the department received a fair and equitable price from the construction contractor to perform the work after the omission or erroneous quantities became known.

There is, however, no set formula for determining damages, and MnDOT reserves all rights to include all relevant factors (including but not limited to costs related to project delay) in its calculation of damages.

Other Situations

There may be cases where a consultant error or omission impacts MnDOT even though no specific construction project is affected. In those cases, damages should generally reflect the cost to MnDOT to correct the consultant’s deliverables, as well as any additional MnDOT staff time to manage the additional consultant work and to review additional submissions. In all situations, MnDOT should assess as damages those costs that MnDOT would not have incurred “but for” the error or omission.

Action Steps

Discovery of Potential Error or Omission, Initial Analysis, Reporting
  1. When a MnDOT employee (or a consultant working for MnDOT) has reason to believe that:
    • A consultant’s deliverables contain an error or omission, and
    • The error or omission will or may have an adverse impact on MnDOT,
    the person must report the situation to the employee’s supervisor (or, if a consultant, to the MnDOT employee designated at the State’s Project Manager in the consultant contract) or other appropriate personnel, such as the State’s Project Manager or the Resident Engineer. If the potential error or omission cannot be easily remedied or if the remedy would result in more than nominal cost or damages, it must be reported to the State’s Project Manager.
  2. The State’s Project Manager, in conjunction with the Resident Engineer if the project has been let or awarded, must make an initial analysis of the report, to assess whether there is reason to believe the consultant’s deliverables contained an error or omission. The Resident Engineer provides information and assists with analyzing the plans and specifications as requested by the State’s Project Manager. If the State’s Project Manager determines that it is more probable than not that an error or omission has occurred, and that MnDOT may incur significant additional costs or suffer other adverse effects because of that error or omission, the State’s Project Manager proceeds to the next step in this Procedure.
  3. The State’s Project Manager reports the initial analysis of the error or omission to the Chair of the Consultant Design Errors Review Committee. The State’s Project Manager provides all relevant documentation as part of such report.
  4. The State’s Project Manager notifies the consultant of the identified potential error or omission and provides the consultant with a reasonable opportunity to assist in the assessment and correction of the error or omission and the mitigation of resulting damages.
Correction of Error by Consultant
  • MnDOT consultant contracts generally require the consultant to correct Errors and Omissions in their deliverables on a timely basis and without charge to MnDOT. The consultant who prepared the deliverables should, whenever practical, be given notice of the potential error or omission, be directed to correct the error or omission, and be afforded the opportunity to have input into MnDOT’s plan to mitigate damages resulting from such error or omission. The State’s Project Manager should initiate this process upon discovery of the potential error or omission.
  • Communication between the State’s Project Manager and the consultant regarding the potential error or omission must be carefully documented, and such documentation made available to the Consultant Design Errors Review Committee.  This may include notes documenting oral conversations that are made at or about the time of the conversation.
  • The State’ Project Manager should not act independently to enter into any agreement or understanding with the consultant that would bar further action against the consultant by MnDOT. There may be additional remedies, including monetary damages, available to MnDOT by contract and by law based on the consultant’s failure to meet contract requirements and failure to meet the “Standard of Care.” Therefore, the State’s Project Manager should not make any agreement or arrangement, or issue any documents, that could be construed as limiting the consultant’s obligation to correct the error or omission or its liability for damages.
Review by Consultant Design Errors Review Committee
  1. Upon receipt of notice from the State’s Project Manager, Resident Engineer, other MnDOT staff, or upon its own initiative, the Consultant Design Errors Review Committee meets at the call of the Chair.
  2. The committee reviews the facts and circumstances surrounding the potential error or omission and:
    • Determines if there is reason to believe that an error or omission has occurred;
    • Assesses the damages to MnDOT; and
    • Makes recommendations to the Commissioner regarding pursuing cost recovery or other remedial measures.
  3. The Committee gathers and reviews written documents and such other information it deems useful and pertinent. The committee may seek information and invite input from the consultant, MnDOT technical, audit, contract, and other staff, persons outside MnDOT and any other entity with relevant information. If appropriate, the consultant that is the subject of the inquiry may be invited to provide written information to the committee. The committee may also invite the consultant and its representatives to meet with the committee.
  4. If the Committee believes that an error or omission has occurred, the committee makes an initial assessment of the nature and magnitude of damages to MnDOT. The committee may consult with staff from the Office of the Attorney General for assistance in determining the likelihood of establishing liability as well as the damages that may be recoverable.
Recommendations by Consultant Design Errors Review Committee
  • Based on its review of the information available to it, and on its assessment of the nature and magnitude of damages to MnDOT, the committee makes a recommendation to the Deputy Commissioner and Chief Engineer. The committee may recommend actions such as, but not limited to, the following:
    • Not pursuing the matter further
    • Accepting correction of the deliverables as a suitable remedy if the nature and magnitude of the damages is minor
    • Requesting monetary reimbursement from the consultant
    • Turning the matter over to Attorney General staff to assess whether it would be reasonable and prudent to pursue legal action
  • The committee may recommend that MnDOT seek non-monetary remedies or impose non-monetary sanctions on the consultant. Non-monetary remedies could include (without limitation) entering into a stipulation whereby the consultant agrees to provide services to MnDOT at no cost; restricting the number, type, or value of contracts which the consultant may be awarded; submitting a negative Vendor Performance Report to the Department of Administration; or taking the consultant off a “prequalified list” or “certified list” for a period of time. Due consideration is given to suspending or debarring the consultant as a state vendor when circumstances warrant such action and when permitted by law.
  • The committee may recommend pursuing other claims that may be available to the department because of the error or omission, such as claims arising under the Minnesota False Claims Act, Minnesota Statutes, Chapter 15C. If the committee identifies a potential False Claims Act violation, the Deputy Chief Counsel for Construction and Contract Management will take appropriate next steps that may include consulting with the Office of the Attorney General.
  • Because each claim is unique in its facts and circumstances, MnDOT’s course of action and any decision as to the outcome is determined at the discretion of the Deputy Commissioner and Chief Engineer.
  • Both the committee’s recommendation to the Deputy Commissioner and Chief Engineer and the Deputy Commissioner and Chief Engineer’s decision are official agency business. The Deputy Chief Counsel for Construction and Contract Management shall maintain a record of the written information that the committee reviewed, the committee recommendation, and the decision of the Deputy Commissioner and Chief Engineer.
Remediation
  • Following a decision by the Deputy Commissioner and Chief Engineer on the committee’s recommendations, the committee designates an individual or team responsible for carrying out the approved course of action. It is anticipated that the committee will generally designate personnel who were responsible for oversight of the consultant contract, such as the State’s Project Manager or the State’s Project Manager’s supervisor, Office Director, or an Assistant District Engineer for Program Delivery. While construction staff need to supply documentation concerning the costs incurred because of an error or omission, it is not anticipated that construction personnel will generally be designated to lead cost recovery efforts.
  • Staff responsible for implementing the approved course of action should confer with the Chief Counsel to develop MnDOT’s approach. Submit draft correspondence to the Chief Counsel for review prior to distributing to the consultant, unless otherwise specified by the Chief Counsel.
  • Because all claims are governed by a statute of limitations, MnDOT personnel must implement the approved course of action promptly and handle all related tasks and correspondence in a timely manner.
Conclusion of Remedial Action, Litigation

The individual or team responsible for implementing the approved course of action is responsible for providing regular updates to the Consultant Design Errors Review Committee.

  • If implementing the approved course of action results in reaching a settlement or other agreement with the consultant, the draft agreement must be submitted to the Deputy Chief Counsel, Construction and Contract Management, for review prior to execution.
  • If it appears that approved remedial action cannot be successfully implemented, the individual responsible for its implementation must inform the Consultant Design Errors Review Committee. The Committee meets to consider making further recommendations to the Deputy Commissioner and Chief Engineer-- for example, recommending that litigation be considered.

Variance from Procedure

While there are not set dollar amounts or thresholds, MnDOT reserves the right to vary the procedures set forth herein as it deems prudent based on the circumstances. For example, procedures that are more informal may be used in cases where the potential damages to the department are relatively minor, the consultant accepts responsibility for an issue and pays an amount that MnDOT staff have determined to be appropriate, or the department and the consultant have agreed to alternative dispute resolution. In the case of a minor error or omission where the intent of the deliverables can be readily discerned, the department reserves the right to correct the deliverables rather than requiring the consultant to do so.