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What You Need To Know About Colorado Bidding Rules

There are a few basic rules that any contractor needs to be aware of before bidding a project in Colorado, including rules related to licensing, bonding, bid preferences for local contractors, local employment rules, bid shopping rules, bid mistakes, and bid protest issues.  No article can cover these topics with the specificity needed to determine whether to bid a project in Colorado, and what steps need to be accomplished to do so (those are issues that should be discussed with a lawyer) but at a very high level, we lay out some of the basic requirements under Colorado Law in this post.

Licensing

Colorado does not have a state level licensing requirement for general contractors.  All general contractor license requirements are handled at the municipal level or county level.  On the other hand, engineers and other design professionals, and certain specialty subcontractors, do require a state license.  And any company seeking to do business in Colorado must file a Statement of Foreign Entity Authority with the Colorado Secretary of State.  C.R.S. § 7-90-801 et seq.

Bid Preference Rules

Colorado has a reciprocal bid preference on public projects.  On such projects, where no federal money is involved, “a resident bidder shall be allowed a preference against a non-resident bidder from a state or foreign country equal to the preference given or required by the state or foreign country in which the non-resident bidder is a resident.”  C.R.S. § 8-19-101.

Local Employee Rules

On Colorado Public Works Projects that do not involve federal money, “Colorado labor shall be employed to perform at least eighty percent of the work.”  C.R.S. § 8-17-101.  This requirement may be waived by the governmental body financing the project if there is “reasonable evidence to demonstrate insufficient Colorado labor to perform the work of the project and if compliance with this article would create an undue burden that would substantially prevent a project from proceeding to completion.”  “Colorado labor” means persons who are residents of the state at the time of the project.  A resident of the state is a person who can provide documentation that he or she has resided in Colorado for the last 30 days.

Bond Requirements

Bid bonds are required on all public construction contracts where the price is estimated to exceed $50,000.  C.R.S. § 24-105-201.  Additionally, payment and performance bonds are required on all public contracts in excess of $150,000.  C.R.S. § 24-105-202.  Similar bond requirements exist for projects below the state level, such as municipal and county projects.  C.R.S. § 38-26-105.  Contractors should be aware that public entities are not authorized to enter into contracts with a contractor or design professional for a public works project unless a full and lawful appropriation has been made for the project.  C.R.S. § 24-91-103.6.  Among other things, change orders that exceed the original amount of the work will not be paid if they cause the aggregate amount payable under the contract to exceed the amount appropriated for the original contract, unless the public entity provides written assurance that lawful appropriations to cover the cost of the additional work have been made and are available for the additional work.

Bid Shopping

There is currently no prohibition under Colorado law against bid shopping.  While a contractor might have an argument that subcontractor bids are binding under a theory of reliance, there is no reciprocal requirement binding the contractor to subcontractor bids absent an agreement.  Contractors should note that oral agreements may be enforceable.

Bid Mistakes

At the state level, mistaken bids may be withdrawn before the award “if the bidder submits proof of evidentiary value which clearly and convincingly demonstrates that an error was made.”  C.R.S. § 24-92-103(6).  In general, the type of mistake that permits withdrawal of a bid is a mathematical error or clear omission, not simply an underbid.  No similar statute applies to bids below the state level (i.e. municipal or county projects), although there is some case law allowing withdrawal of a mistaken bid under similar circumstances.  Note that typically the remedy for a mistaken bid is withdrawal of the bid, not correction of the bid.

Bid Protests

Bid protests are always a bit of a long shot.  For projects at the state level, the state procurement code allows a protest within seven working days after the complaining party knows or should have known about the facts supporting the protest.  C.R.S. § 24-109-102.  If a protest is upheld before the award of contract, the solicitation or proposed award is cancelled or revised to comply with the law.  C.R.S. § 24-109-402.  If a protest is upheld after an award, the contract may be terminated, or it may be ratified if it is determined that doing so is in the best interest of the state.  C.R.S. § 24-109-403.  For protests that are not under the state procurement code, standing to assert a protest is limited unless the rules of the government entity provide otherwise.  Absent a local rule providing for a protest, a disappointed bidder has no standing under Colorado law to challenge the award unless it also happens to be a tax payer of the particular entity awarding the contract.

CONCLUSION

Obviously, we have only offered a bare bones description of some of the issues that should matter to a contractor wishing to bid on public projects in Colorado.

Copyright Holland & Hart LLP 1995-2017.

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About this Author

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Kevin Bridston works closely with clients throughout the United States to achieve optimal outcomes in complicated construction and real estate litigation matters.

30 Years As a Trial Lawyer: For almost 30 years, Kevin has skillfully represented both plaintiffs and defendants in trials and appeals in a wide range of state and federal courts, as well as arbitration and mediation. When his clients’ reputations are on the line, he provides sound counsel.

Recognized for Knowledge and Experience: Since 2011,...

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Timothy Gordon, Holland Hart, commercial real estate attorney, property management lawyer, business litigation counsel, Colorado construction law, complex dispute representation
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By clearing up and resolving legal problems, Mr. Gordon helps his clients get the most value out of their real property. Mr. Gordon represents construction and commercial real estate clients in complex disputes, and understands the interrelationship between the long-term real estate development, project construction, and property management. His clients trust him to protect their interests in drafting construction and design contracts, and to achieve favorable results when their businesses face litigation.

A thought leader in construction law, he currently authors “Construction Law in Colorado,” a blog that provides insight on key cases and developments relevant to construction law in Colorado, and is the Co-Managing Editor of The Practitioner's Guide to Colorado Construction Law, a three-volume treatise on construction law in Colorado.

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Sean Hanlon consistently achieves positive outcomes for clients, whether through contract drafting and negotiation, settlement, dispositive motion, trial, or appeal.

With a decade of litigation and trial experience, Sean is focused on counseling clients through the whole life cycle of commercial construction projects. Understanding the litigation of construction disputes, Sean and his team of project attorneys anticipate problems and protect clients’ interests in drafting and negotiating construction and design contracts. Through informed...

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