Colorado § 24-91-103.6 - Public entity - contracts - appropriations - contract modifications - severability - definition.

§ 24-91-103.6. Public entity - contracts - appropriations - contract modifications - severability - definition.

(1) No public entity shall contract with a designer, a contractor, or a designer and contractor for the construction, the design, or both the construction and design of a public works project unless a full and lawful appropriation when required by statute, charter, ordinance, resolution, or rule or regulation has been made for such project.

(2) Every public works contract, as defined in section 24-91-103.5 (1)(b), shall contain the following:

(a) A statement that the amount of money appropriated is equal to or in excess of the contract amount;

(b) A clause that prohibits the issuance of any contract modification, as defined in section 24-101-301 (10), or other form of modification or directive by the public entity requiring additional compensable work to be performed, which work causes the aggregate amount payable under the contract to exceed the amount appropriated for the original contract, unless the contractor is given written assurance by the public entity that lawful appropriations to cover the costs of the additional work have been made and the appropriations are available prior to performance of the additional work or unless such work is covered under a remedy-granting provision in the contract; and

(c) For any form of modification or directive by the public entity requiring additional compensable work to be performed, a clause that requires the public entity to reimburse the contractor for the contractor's costs on a periodic basis, as those terms are defined in the contract, for all additional directed work performed until a contract modification is finalized. In no instance shall the periodic reimbursement be required before the contractor has submitted an estimate of cost to the public entity for the additional compensable work to be performed. Notwithstanding the provisions of this subsection (2)(c), state public works contracts shall be subject to the provisions of section 24-30-202.

(3) If the requirements of subsection (1) or (2) of this section are not met, a civil action may be maintained against the public entity which has contracted for the public works project to recover sums due under the contract notwithstanding any appropriation statute, ordinance, resolution, or law to the contrary.

(4) In the event that a good faith dispute arises between a public entity and a contractor concerning the contractor's right to receive additional compensation under a remedy-granting provision of the public works contract, it shall not be a defense to a civil action for payment for such claim that no moneys have been appropriated for such claimed amounts, so long as the contractor has complied with all provisions of the contract applicable to the dispute, including but not limited to contract modification and additional work clauses, and has submitted to the public entity a statement sworn to under penalty of perjury which sets forth: The amount of additional compensation to which the contractor contends that it is entitled; that claim-supporting data which is accurate and complete to the best of the contractor's knowledge and belief have been submitted; and that the amount requested accurately reflects what is owed by the public entity. As used in this subsection (4), "remedy-granting provision" means any contract clause which permits additional compensation in the event that a specific contingency or event occurs. Such term shall include, but shall not be limited to, change clauses, differing site conditions clauses, variation in quantities clauses, and termination for convenience clauses.

(5) If a final judgment is entered pursuant to a civil action brought by a contractor for which adequate appropriations have not been made, the judgment debtor public entity shall promptly make payment pursuant to section 13-60-101, 24-10-113, 24-10-113.5, or 30-25-104, C.R.S., and any other statutory requirement on payment of judgments.

(6) Any provision of this section which is in conflict with the terms of any federal grant shall be inapplicable to a contract between a contractor and a public entity which is funded in whole or in part by that grant.

(7) Nothing in this section shall prohibit:

(a) The use of phased construction over a period of years where, if applicable, the public entity has informed the contractor of initial annual appropriations at the time the contract is signed, and subsequent annual appropriations as they occur, in statements issued pursuant to subsection (2) of this section; or

(b) The use of bond-financed construction where appropriations to service bond debt may occur subsequent to the commencement of construction, where this fact is clearly stated in disclosure statements made pursuant to subsection (2) of this section.

(8) The provisions of this section shall apply to any contract executed on or after July 1, 1992.

(9) If any provision of this section or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.

Source: L. 92: Entire section added, p. 1087, § 2, effective July 1. L. 2010: (2) amended, (SB 10-116), ch. 53, p. 198, § 1, effective August 11. L. 2011: (2)(b) amended, (HB 11-1202), ch. 37, p. 101, § 2, effective August 10. L. 2017: (2)(b), (2)(c), and (4) amended, (HB 17-1051), ch. 99, p. 351, § 67, effective August 9.

Cross references: For the legislative declaration in the 2011 act amending subsection (2)(b), see section 1 of chapter 37, Session Laws of Colorado 2011.

ANNOTATION

Law reviews. For article, "Indemnity Clauses in Local Government Contracts", see 43 Colo. Law. 53 (Dec. 2014).

The clear purpose of the provision in subsection (4) requiring submission of a sworn statement is to allow the public entity an opportunity to review the contractor's claim, determine its validity and the accuracy of its computation, and decide whether or not to pay the requested sum before litigation. Thyssenkrupp Safway v. Hyland Hills Parks, 271 P.3d 587 (Colo. App. 2011).

Timing of sworn statement. Although the statute does not specify when it must be provided, the plain language of subsection (4) states that the sworn statement must be "submitted to the public entity," not submitted to the trial court. It follows, therefore, that when the claim is based on a contract and has arisen before trial, the statement must be submitted to the entity sometime before trial. Thyssenkrupp Safway v. Hyland Hills Parks, 271 P.3d 587 (Colo. App. 2011).