Legislation introduced today by Rep. Paul Workman (R-Austin) would waive the state’s immunity from suit under the doctrine of sovereign immunity for claims arising from a contract for goods and services in excess of $250,000. The Senate companion is SB 296 by Sen. Robert Deuell (R-Greenville).
HB 586/SB 296 allows a contractor may bring suit against a state agency, including an institution of higher education, for breach of an express or implied provision in a contract. A prevailing contractor may recover the balance owed by the state under the contract, including additional amounts owed as a result of owner-caused delay or acceleration, the amount owed for charge orders or additional work, and interest. Consequential and exemplary damages, as well as those for unabsorbed home office overhead, may not be recovered.
The bill provides further that contract provisions requiring arbitration or ADR proceedings prior to bringing suit are enforceable, unless they conflict with the waiver of immunity. The bill does not waive immunity in federal court or immunity for tort liability. It does not apply to employment contracts, nor does it authorize recovery of attorney’s fees unless the contract provides otherwise. Venue for an action seeking damages for breach of contract against a state agency is proper in Travis County or in the county in which the acts or omissions giving rise to the claim occurred. HB 586/SB 296 applies to claims arising under a contract executed on or after September 1, 2013.