Chapter 4 - § 4.15 • CONTRACT CONTROVERSIES

• Jurisdiction: Colorado

§ 4.15 • CONTRACT CONTROVERSIES

§ 4.15.1-Sovereign Immunity

The state has sovereign immunity from suits that lie in tort or could lie in tort, but this immunity does not extend to breach of contract actions against the state and its agencies.²³⁴ The Colorado Procurement Code specifically waives sovereign immunity for controversies between the state and contractors arising under or by virtue of contracts between them, including, but not limited to, controversies that are based upon breach of contract, mistake, misrepresentation, or any other cause for contract modification or rescission.²³⁵ In 2009, the Colorado Supreme Court found that sovereign immunity would not shield a municipality from damages for lost profits due to impaired bonding capacity.²³⁶

§ 4.15.2-Forum and Remedies

The Colorado Procurement Code and Colorado Procurement Rules that apply to bid protests also apply to contract controversies,²³⁷ with the exceptions noted below. First, the procurement official or his or her designee must make a written decision regarding a contract controversy within 20 business days after receiving a written request for a final decision by the contractor.²³⁸ Second, in the final decision, the contractor must be furnished with (1) a description of the controversy, (2) a reference to the contract provision, (3) a statement of facts, (4) the reasons for the decision, and (5) notice of rights to administrative and judicial review.²³⁹ Third, if amounts and interest are found due to the contractor, they should be paid.²⁴⁰ Fourth, an appeal to the executive director must be made within 20 business days, instead of 10, after receipt of the decision.²⁴¹ Finally, an appeal to the district court must be made within 20 business days, instead of 10, after the date of the decision.²⁴²

Despite the aforementioned provisions in the Colorado Procurement Code and Colorado Procurement Rules, many state construction projects contain contract provisions detailing alternative dispute resolution or administrative procedures that contractors must exhaust before proceeding with litigation or other remedies.

A contractor who prevails in an administrative or court action resulting from a contract controversy may receive money damages, as well as interest on the amounts determined to be due.²⁴³

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Notes:

^[234] See Ace Flying Serv., Inc. v. Colo. Dep't of Agric., 314 P.2d 278, 281 (Colo. 1957). See also Spaur v. City of Greeley, 372 P.2d 730, 731 (Colo. 1962); Trimble v. City & County...