Capital Project Delivery

Errors and Omissions

Summary

The New Jersey Department of Transportation's (NJDOT) Division of Project Management has developed a Design Errors and/or Omissions (E&O) Process to reinforce Design accountability and recover additional project costs due to carelessness or negligence of Consultants as part of Design, Construction Engineering or Construction Inspection (CI) services.

Objectives

By enforcing the process, NJDOT will obtain higher quality plans and contract documents, which will enable NJDOT to deliver projects according to approved schedules and within fiscal constraints.

NJDOT has identified three specific objectives for the E&O Process to:

• communicate as soon as possible with the Consultant* when a potential E&O is discovered; to minimize possible costly delays to the project due to design, construction engineering or construction inspection issues;
  
• provide the Consultant* the earliest opportunity to participate in determining a solution, in an effort to resolve issues and mitigate damages; and
  
• provide a process between the NJDOT and Consultant* that is fair and promotes a working partnership.

The Errors and/or Omissions Process has seven key tasks:

• Discovery - The NJDOT is either given a "notice" of potential claim by the Contractor or NJDOT staff has identified either a Design "issue" or a CI "issue", that may be a potential E&O;
  
• Notification - Once a Designor CI issue is identified, it is a contractual requirement that the NJDOT send the Consultant* the appropriate written notice of a potential E&O as soon as possible;
  
• Inquiry and Verification - The NJDOT, when conducting its inquiry, considers the Consultant’s response when verifying if there were Errors and Omissions and if the costs are recoverable. A Consultant may defend its design or cost impacts through either the Contractual Claims Resolution Process (if a "claim") or by the Capital Program Management (CPM) E&O Resolution Process (if NJDOT seeks Change Order cost recovery);
  
• Negotiation - If an E&O is verified, NJDOT will enter into negotiations with a Consultant to recover costs. Several negotiation steps may be offered to a Consultant;
  
• Recovery/Collection - A settlement may require the NJDOT and Consultant to enter into a formal Agreement with Releases. NJDOT shall invoice the Consultant and collect any settlements per NJDOT’s Policy and Procedure No. 230, Cash Receipts-Invoicing;
  
• Tracking/Reporting - NJDOT will utilize the Project Reporting System (PRS) to track and report the status of an E&O. The Project Manager will be responsible for recording the status of each potential E&O; and
  
• Training/Evaluation - NJDOT’s Program Management Office (PMO) will assist in conducting training for personnel and tracking "lessons learned"

*Issue a NJDOT memorandum for in-house design.