August 18, 2019

HB 13-1090: Setting Payment Requirements for Private and Public Construction Projects

On January 17, 2013, Rep. Randy Fischer and Sen. Lois Tochtrop introduced HB 13-1090 – Concerning Payment of Amounts Due Under a Construction AgreementThis summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill sets the following requirements for both private and public construction contracts:

  • The owner and contractor must make regular progress payments approximately every 30 days to contractors and subcontractors for work actually performed.
  • To receive the progress payments, the contractor and subcontractor must submit a progress payment invoice plus any required documents.
  • A contractor must pass on the progress payment to the subcontractor within five days or by the end of the billing cycle.
  • Interest accrues on unpaid progress payments.
  • A contract may extend a billing cycle to 60 days, but the contract must duly warn of this.
  • An owner or contractor may only retain five percent of each progress payment to ensure work is done properly.
  • If a subcontractor’s work is done before the whole project is done, the subcontractor may apply to be paid the retained five percent. The owner and contractor must pay the retainage if the work is done correctly and the subcontractor gives waivers and the proper documents.
  • A person who retains from a payment must give the contractor or subcontractor a chance to cure the default.
  • The owner and contractor must pay for changes made to the contract. If they cannot agree on the price, the person doing the work may bill monthly at cost plus 15 percent or terminate performance.
  • A contractor or subcontractor is authorized to suspend performance after 15 days notice if the owner or contractor fails to make progress payments.
  • After suspending performance, the contractor or subcontractor is obliged to resume work after being paid for the work and reasonable costs and interest.
  • A contractor or subcontractor may not suspend performance if the failure to make a payment is due to a failure of the contractor or subcontractor or a dispute about the construction.

The bill voids any provision in a construction contract that does not comply with these requirements. The bill is assigned to the Business, Labor, Economic, & Workforce Development Committee.

Print Friendly, PDF & Email

Speak Your Mind