Chapter 1 - § 1.2 PUBLIC WORKS PROJECTS

• Jurisdiction: Colorado

§ 1.2 PUBLIC WORKS PROJECTS

Similar principles apply in the public works context. Like mechanics' liens, the contractor's bonds and lien on funds statutes apply to those who provide labor, materials, machinery, tools, and equipment to construction projects. Because of the nature of public works projects and the fact that a private person cannot lien, foreclose the lien, and sell public buildings, roads, and other structures, Colorado developed the contractor's bonds and lien on funds statutes found at C.R.S. §§ 38-26-101, et seq., including specifically C.R.S. § 38-26-107. This statute stands "in lieu of the mechanics' lien statute; it is designed to protect those who supply labor and materials for public buildings."⁷ Underlying these statutes are the concepts that the contractor's bonds and lien on funds statutes are designed to protect all persons who supply labor or material for public works projects and are the public works counterpart of the mechanics' lien statutes.⁸

To ensure that persons who provide services to contractors engaged in such projects obtain payment of unpaid claims against the contractor, the Act requires any public body that awards a contract to withhold from the contractor sufficient funds "to insure the payment of said claims until the same have been paid or such claims as filed have been withdrawn."⁹ The Act requires public agencies, prior to completing their contractual obligations to the contractor, to pay valid outstanding claims owed by the contractor to subcontractors. This analysis reflects the rationale of numerous cases establishing the principle that suppliers of labor and of materials have preferred positions in terms of demands upon retained funds in the context of public works contracts.

With these principles in mind, this book provides an outline and much detailed information about the application of the law of liens and claims with several goals in mind:

1) To explain mechanics' and other similar liens laws and provide information on the applicable rights, remedies, and procedures;
2) To explain who may claim a lien, under what circumstances one may be claimed, and for what amount one may be filed;
3) To set out the procedures for establishing a lien, describe the important time limits, and point out when filing is necessary;
4) To outline the procedures for

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