Legislature creates deadlines for director’s
decisions on verified claims submitted to the
North Carolina Office of State Construction
Last summer, Gov. Roy Cooper
signed into law the first significant
changes to the State’s “Verified
Claims” process in over 30 years.

Senate Bill 255 (ratified as S.L.

2019-39) amended N.C. Gen. Stat.

§143-135.3. The legislation was ti-
tled “An act providing the time pe-
riod in which the Director of the
Office of State Construction shall
issue a final order allowing or deny-
ing a contractor’s verified written
claim.” As the title of the legislation
states, the General Assembly added
specific deadlines for the Director
of the Office of State Construction
to issue decisions on verified claims
submitted to his office. This is a sig-
nificant change to existing law as it
effects virtually all claims bought by
contractors on state construction
projects. Claims on North Carolina
Department of Transportation
(NCDOT) projects are not, however,
affected by this legislation. Claims
on NCDOT projects are subject to a
separate Verified Claims process
under N.C. Gen. Stat. §136-26.

The significance of the amend-
ment to §143-135.3 is greater than
just the breadth of claims affected.

There are now clearly stated dead-
lines for the director to issue final
decisions on Verified Claims.

Prior to this amendment, the only
deadline in §143-135.3 was that
“the Director shall investigate a sub-
mitted claim within 90 days of re-
ceiving the claim, or within any
longer time period upon which the
Director and the contractor agree.”
That was the extent of any express
deadline for the director to act.

The Office of State Construction
has for many years taken the posi-
tion that the 90-day deadline was a
8 — JAN/FEB 2020 — The North Carolina Construction News
© Can Stock Photo / ronnarong
By Paul E. Davis
Special to North Carolina Construction News
deadline to begin the investigation
and nothing more; that there was
nothing in this statute or in any
other statute or regulation that set a
deadline for issuance of the direc-
tor’s decision on the claim.

Senate Bill 255 deleted that sen-
tence and added three specific
deadlines for the director’s decision
depending on the amount of the
claim. For claims of less than $100,000,
the director “shall investigate and
issue a final written decision” within
120 days of receipt of the contrac-
tor’s Verified Claim;
For claims of at least $100,000
but less than $5,000,000, the direc-
tor shall investigate and issue a final
written decision within 180 days of
receipt of the contractor’s Verified
Claim; and
For claims of $5 million or more,
the director shall investigate and
issue a final written decision within
270 days of receipt of the contrac-
tor’s Verified Claim.

The General Assembly also
added a “deemed denied” provision
to the statute. If the Director does
not issue a final written decision
within the applicable time period (or
at the expiration of any mutually
agreed-upon extended time period)
the Verified Claim will be deemed
denied. The addition of the