The notice of default is considered an interim step required before a company can be formally defaulted or terminated from a project. Sometimes the notice sets the stage for a negotiation of disputed facts and funds.

The authority, created in 2002 to alleviate traffic congestion in Williamson and Travis counties, has a number of substantial projects in different stages of planning and construction. One of them, the MoPac Improvement Project, will add toll lanes in both directions to an 11-mile stretch between downtown Austin and Parmer Lane. The total project budget was set at about $200 million, and CH2M Hill’s contract was for $137 million.

In February 2013, CH2M Hill won the best-value design-build contract, beating out two short-listed joint ventures: JD Abrams LP and The Lane Construction Corp. and Dan Williams Co. and Sundt Construction.

At the time it issued the default notice, the authority said in a statement that it already had assessed CH2M Hill more than $1 million in contractually specified damages related to alleged unauthorized lane closures. According to the authority, CH2M’s total possible damages are capped at $20 million.

Also, the authority stated, CH2M was submitting delay claims that the authority maintained, until then, it had “not found justification” to compensate CH2M for the claims or to extend the completion deadline.