(a) Following receipt of a contractor's notice of claim, the agency's chief administrative officer or his designee, shall review the contractor's claim and the agency's counterclaim, if any, and initiate negotiations with the contractor to attempt to resolve the claim and counterclaim.
(b) Subject to subsection (c) of this section, the parties shall begin negotiations within a reasonable period of time, not to exceed 60 calendar days following the later of:
  (1) the date of termination of the contract;
  (2) the completion date in the original contract; or
  (3) the date the agency receives the contractor's notice of claim.
(c) The agency may delay negotiations until after the 180th day from the date of the event giving rise to the claim of breach of contract by delivering written notice to the contractor that the commencement of negotiations will be delayed and notice of when the agency will be ready to begin negotiations.
(d) The parties may conduct negotiations according to an agreed schedule as long as they complete the negotiations no later than 270 days after the agency receives the contractor's notice of claim.
(e) The parties may agree in writing on or before the 270th day after the agency receives the contractor's notice of claim to extend the time for negotiations. The agreement shall be signed by representatives of the parties with authority to bind each respective party and shall provide for the extension of the statutory negotiation period until a date certain. The parties may enter into a series of written extension agreements that comply with the requirements of this section.
(f) The contractor may request a contested case hearing before the State Office of Administrative Hearings on or before the 270th day after the agency receives the contractor's notice of claim, or the expiration of any extension agreed to by the parties.
(g) The parties may agree to mediate the dispute at any time before the 270th day after the agency receives the contractor's notice of claim or before the expiration of any extension agreed to by the parties pursuant to subsection (e) of this section.

Source Note: The provisions of this §456.8 adopted to be effective June 5, 2008, 33 TexReg 4344