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Is a State School funded by local bonds and a Best Grant in Colorado covered by the prompt pay act?

ColoradoPrompt Payment

I am the owner of a SMB mechanical contracting company here in Colorado. We are working for a Denver contractor and struggling to get paid. We now have $1.5M still outstanding for January, and another $1.3M just at 30 days. I need to understand if a prompt payment demand letter from my lawyer is the correct next step? Is the job covered by the act?

7 replies

Mar 31, 2020

The Prompt Payment Act only applies to Federal Governmental Agencies that fail to pay within the required contractual time. If your project does not involve a federal agency, the Prompt Payment Act would not be applicable. However, in Colorado, any contract for more than $50,000 with any county, municipality, or school district for the construction of any public building or the prosecution or completion of any public works or for repairs upon any public building is covered under Colo. Rev. Statute 38-26-105. Under this Colorado statute - All labor, laborers, materials, rental machinery, tools or equipment used or performed in the work by a contractor or his subcontractor are covered. If a claimant has not been paid, the claimant can deliver a notice called a "verified statement of the amount due and unpaid on account of the claim" to any county, municipality, or school district or the state. The party served must then withhold payments from the contractor in a sufficient amount to assure payment of the claimant. See C.R.S. 38-26-103 & 38-26-107.

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Mar 31, 2020

I was talking about the Colorado prompt payment act Colo. Rev. Stat. §§24-91-101 – 24-91-103, not the federal. Are you saying that the Colorado act dose not apply to a state school funded by local bonds and a Best Grant?

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Mar 31, 2020

The Colorado Prompt Payment does not apply in the case of a contract made or awarded by any public entity if a part of the contract price is to be paid with funds from the federal government or from some other source and if the federal government or such other source has requirements concerning retention or payment of funds which are applicable to the contract and which are inconsistent with the act. See Colo.Rev.Stat. § 24-91-110. Since BEST Grant is state not federal, then the Colorado Prompt Payment Act DOES APPLY

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