BILL ANALYSIS

 

 

Senate Research Center	S.B. 776
89R3521 AJA-F	By: Hughes
	Business & Commerce
	3/28/2025
	As Filed

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

For governmental construction projects, contractual clauses dictating which party is responsible for delays are often non-negotiable�contractors must accept these clauses as-is.

 

S.B. 776 would prohibit a governmental entity from using contractual clauses to shift the consequences for delays solely caused by the governmental entity onto private sector contractors. This would help restore fairness and mutual enforceability of contractual clauses on government construction projects. 

 

As proposed, S.B. 776 amends current law relating to the award of compensatory damages caused by certain delays under governmental construction contracts.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Subchapter Z, Chapter 2252, Government Code, by adding Section 2252.911, as follows:

 

Sec. 2252.911. COMPENSATORY DAMAGES CAUSED BY GOVERNMENTAL DELAYS IN CONSTRUCTION CONTRACTS. (a) Defines "compensatory damages," "contractor," and "governmental entity."

 

(b) Prohibits a provision of a construction contract between a governmental entity and a contractor from prohibiting the award of compensatory damages to the contractor for a delay to the extent that the delay is caused solely by the governmental entity or by a party for which the governmental entity is responsible.

 

(c) Provides that this section does not restrict, limit, or prohibit the inclusion of a contract provision in a construction contract prescribing requirements or conditions that are required to be met by a contractor to seek recovery of compensatory damages, including requirements or conditions relating to notice, justification, or a duty to mitigate or for demonstrating or proving the actual cost or schedule impact of a delay.

 

(d) Prohibits this section from being waived. Provides that a purported waiver of this section in violation of this subsection is void.

 

(e) Provides that this section does not apply to a construction contract for services related to recovery or relief from a natural disaster involving the repair or renovation of a residence or that is subject to Section 201.112 (Contract Claims), Transportation Code.

 

SECTION 2. Makes application of this Act prospective.

 

SECTION 3. Effective date: September 1, 2025.