Home>Levelset Community>Legal Help>In Colorado, is a construction job funded by federal/state public funds through a non-profit entity considered public for the purposes of sub-contractor payment requirements?

In Colorado, is a construction job funded by federal/state public funds through a non-profit entity considered public for the purposes of sub-contractor payment requirements?

We are sub-contracted to a private company that is contracted to a private prime contractor that is contracted to a non-profit entity which is using a public money (federal/state) grant to complete flood repair construction work. We have not been paid for 6 months after completing our work. The private companies say they haven't been paid by the non-profit so they can't pay us.

1 reply

Apr 27, 2018

First, I'll note that the presence of federal funds won't necessarily affect project type. Further, whether a project is public or private for the purposes of payment laws will often boil down to the owner of the underlying property. Then again, that might not always be cut and dry either. As for Colorado's prompt payment laws, it does not appear that the designation of "public" or "private" will matter all that much. In Colorado, the prompt payment laws are the same for parties on both public and private projects - a subcontractor will have 7 days to make payments down the chain from the time they receive payment themselves. As for determining whether the project is subject to mechanics liens (or if bond claims would be available), it would be helpful to look to (1) the underlying owner of the property, and (2) who initiated the project. If the underlying property is publicly owned, the chances are that a bond claim will be the only option available for securing payment since public property cannot be liened. Further, if the project was planned and bid by a public entity, payment and performance bonds would likely be present and probably more appropriate than a mechanics lien claim. Finally, if things are still unclear, there may be another option to make the determination. In Colorado, any claimant on a public project may request and obtain a copy of the project's payment bond if the claimant requests a copy from the state. Thus, if it's unclear whether bonds are available on the project, a claimant could potentially request bonding information from the state - if the state says that no bonds are on the project, a bond claim obviously won't be an available route for recovery. Keep in mind that while this is a good indicator as to whether a project is public or private (and whether a lien claim or a bond claim might be more appropriate), it's not black and white. With the advent of complex project types, sometimes a project will not be subject to lien claims and bonds might not be present.

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