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
“deemed denied” provision re-
moves uncertainty as to the effect
of the director’s failure to timely
act. Without the Director’s written
final decision on a Verified Claim, a
contractor is unable to seek fur-
ther review of its claim either by
commencing a contested case
under the North Carolina Adminis-
trative Procedure Act or by com-
mencing a civil action in North
Carolina Superior Court. The addi-
tion of deadlines and the deemed
denied provision are welcome
changes to the Verified Claim
process. The amendment to the statute
was effective on Jan. 1, 2020 and
applies to Verified Claims submit-
ted on or after that date.
https://www.ncleg.gov/enact- edlegislation/sessionlaws/pdf/201
9-2020/sl2019-39.pdf. Paul Davis is a construction lawyer
with Conner Gwyn Schenck
PLLC, based in Raleigh. He has
studied and briefed virtually every
aspect of construction contract law
and concentrates his practice in
the areas of construction arbitra-
tion and litigation and contract
drafting and negotiation for public
and private clients, including
general contractors, construction
managers, and subcontractors.
He can be reached by email
at pdavis@cgspllc.com or by phone
at (919) 789-9242 (Ext. 2343).
Raleigh-Durham top growing
city in country – if you’re
arriving with a U-Haul
North Carolina Construction News staff writer
Raleigh-Durham is the top-grow-
ing city in the country, according to
new data from the do-it-yourself
moving company U-Haul.
The metro area was number one
for growth in 2019, the company
said in a statement, adding that the
rankings were based on the number
of self-service trucks that went to
various cities and left on one-way
trips. “We’re seeing Silicon Valley tal-
ent and companies flock to the
area,” Kris Smith, the company’s
Raleigh president, said in a January
news release. “With a competitive
cost of living, good wages and job
growth, Raleigh-Durham is experi-
encing a boom in population.”
Statewide, North Carolina ranked
No. 3 for growth in the United
States, a jump from No. 24 the pre-
vious year, according to U-Haul.
“Arrivals of one-way U-Haul
trucks in the Raleigh-Durham market
were up more than 3 percent, while
departures dropped more than 2
percent, compared to the market’s
2018 numbers,” the news release
said. Wilmington also cracked the top
25 list of places for growth – finish-
ing at 24.
U-Haul says its numbers don’t
have a direct correlation to popula-
tion but can be “an effective gauge
of how well cities and states are at-
tracting and maintaining residents.”
North Carolina Construction News (NCCN) is distributed throughout the
Carolinas construction industry.
NCCN is circulated on a controlled circulation list to qualified readers
including members of most major construction associations in the Carolinas.
The magazine is supplemented by a weekly e-letter which reaches more
than 4,000 industry leaders each week.
For information contact:
Chase, Phone: 1-888-627-8717 ext 212
chase@ncconstructionnews.com www.ncconstructionnews.com. ISSN 1940-3682.
The North Carolina Construction News — JAN/FEB 2020 — 9