South Carolina Code of Regulations
Chapter 63 - DEPARTMENT OF HIGHWAYS AND PUBLIC TRANSPORTATION
Article 8 - DISADVANTAGED BUSINESS ENTERPRISES PROGRAM
Section 63-717 - Claims Procedure on Non-bonded Contracts

A. Every person who has furnished labor or material under a Department-approved contract in the prosecution of the work of a non-bonded contract and who has not been paid in full therefor before the expiration of sixty days after either (1) the day on which the last of the labor was done or performed by the claimant, or material was furnished or supplied by the claimant, for which such claim is made; or, (2) the day on which payment was made by the Department to the DBE contractor for the work or materials for which such claim was made, shall have the right to make a claim to the Department, acting as Surety, for the amount, or the balance thereof, unpaid at the time the claim is made; provided, however, that any person having a direct contractual relationship with a sub-contractor but no contractual relationship expressed or implied with the DBE prime contractor shall have the right to make a claim upon giving written notice to the DBE prime contractor within sixty days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom material was furnished or supplied or for whom labor was done or performed. In no event shall any claim be made after the expiration of ninety days from the date of final payment by the Department.

B. No claim shall be considered legitimate unless it is supported by a written agreement or invoice.

C. Within thirty days after receiving a claim, the official engineer shall refer the claim to the Department's Official Engineer, to gather the information necessary for an analysis of the claim. The Official Engineer shall forward the claim along with any additional information to a Claims Committee. The Claims Committee shall be appointed by the State Highway Engineer. The Department's Executive Assistant for Minority Affairs shall serve as an Ex-Officio member of each Claims Committee.

D. The Claims Committee shall give ten days written notice to the claimant and DBE contractor of the time and place for an informal hearing on the claim. At such hearing the claimant and DBE contractor shall have the right to appear and present evidence concerning the validity of the claim. The DBE contractor, or an employee of the DBE contractor having knowledge of the claim, must appear at the hearing if requested by the Claims Committee. Failure of the DBE contractor, or employee of the DBE contractor, to appear when requested may, in the Department's discretion, constitute grounds for immediate termination of the contract.

E. The Claims Committee shall take into account circumstances such as unsettled payments and disputes with the Department or other circumstances that are beyond the DBE's control.

F. The Claims Committee shall make a written recommendation to the State Highway Engineer as to the resolution of the claim within ten days of the hearing. The State Highway Engineer shall consider the recommendation and make the final decision as to the resolution of the claim. The State Highway Engineer will notify the claimant and DBE contractor of the decision within ten days after receipt of the Claims Committee's recommendation.

G. If the Department's decision requires the payment of money to the claimant by the DBE contractor, the Department shall pay such money to the claimant on behalf of the DBE contractor. Payment shall be made to the claimant within twenty-one days of the Department's final decision. Payment shall be made from contract funds or retainage. In the event contract funds or retainage are insufficient to make full payment of claim, the payment amount shall be charged to the same funding source as was used for the project out of which the claim arose.

H. The DBE contractor shall reimburse or indemnify the Department for all amounts paid to a claimant on behalf of the DBE contractor. The DBE contractor shall be ineligible for further Department non-bonded contracts until the DBE contractor has reimbursed the Department or made acceptable arrangements to reimburse the Department. The DBE contractor may also be disqualified from bidding on any and all Department contracts pursuant to the provisions of Section 102.3 of the Department's Standard Specifications for Highway Construction and be ineligible for approval as a DBE subcontractor on any Department contract with a DBE goal.