Colorado Performance BondLocal, State & CDOT — Not One Rule

Yes. C.R.S. § 38-26-105 lets any person, copartnership, association, company, or corporation "supplying or furnishing labor, laborers, materials, rental machinery, tools, or equipment" sue the bond directly, whether your contract runs through the prime contractor or a subcontractor. You do not need privity with the county or municipality. The catch is timing: the statute requires the action to be brought within six months after completion of the work. That clock is separate from and shorter than the 90-day final-settlement claim window under § 38-26-107 — miss the six-month deadline and the direct-suit right on the payment bond is gone regardless of what the final settlement notice said.

Not necessarily, but the clock is unforgiving once the notice runs. Under § 38-26-107, on any contract over $150,000 the contracting body must publish notice of final settlement at least twice in a newspaper of general circulation (or an approved electronic medium) no later than ten days before the settlement date. Once that date passes, you have 90 days to commence an action against the bond or the withheld funds get released. If you are inside the 90 days, file immediately — including a notice of lis pendens with the contracting body — because that filing is what extends the fund-withholding beyond the 90-day mark while your case proceeds. If the 90 days have already run and no action was filed, the practical recovery path narrows sharply; talk to construction counsel about whether the contracting body actually complied with the publication requirement, since a defective publication can reopen the window.

Yes. The local-government threshold under § 38-26-105 and § 38-26-106(3)(a) is contracts over $50,000 — a $120,000 county contract is well past it. What often surprises contractors is that Colorado bonds this differently than states with separate performance and payment bonds: § 38-26-106(2) makes it one combined penal bond that secures both faithful performance of the contract and payment to labor and material suppliers, set at a statutory floor of 50% of the contract price ($60,000 minimum here), though many counties and municipalities set the penal sum at 100% by contract terms. Confirm which the county actually requires before you price the bond into your bid — the difference between $60,000 and $120,000 of bonded exposure changes your premium meaningfully.

Probably not through the full 2 CCR 601-10 prequalification process, but confirm with the specific Invitation for Bids. The rules define a "Public Project" as CDOT highway, bridge, or maintenance work "for which appropriation or expenditure of funds may be reasonably expected to exceed one hundred fifty thousand dollars in the aggregate for any fiscal year." A single $130,000 contract sits under that figure. But CDOT calculates the aggregate across everything you might be awarded that fiscal year, not just the one project in front of you — and the Invitation for Bids itself can impose Special Prequalification criteria regardless of contract size. Do not assume you are exempt; check the specific solicitation.

No — they serve different purposes and happen at different stages. The bonding capacity letter is a prequalification document: 2 CCR 601-10 § 2.02.1(j) requires every application to include "a recently signed and dated letter from the bonding agent or bonding company indicating the single project performance bond capacity for the Contractor." Section 2.04.1(d) adds the age limit — when CDOT relies on that letter to evaluate your financial capability, it "cannot be more than two months old upon receipt" by CDOT. That letter tells CDOT you can bond a project of a given size — it is not the bond itself and does not secure any contract. The actual performance bond gets executed after you are awarded a specific contract, sized to that contract's value under § 24-105-202. We issue both: the capacity letter for your prequalification file, then the bond once you win the award.

It is not an automatic disqualification. CDOT's presumptive ratios under 2 CCR 601-10 Section 2.04.1(d) are Total Current Assets to Total Current Liabilities greater than 1.0, Cash and Accounts Receivable to Total Current Liabilities greater than 1.0, Net Fixed Assets to Net Worth less than 2.3, and Total Liabilities to Net Worth less than 4.0. If your financials fall outside one of those ranges, the rule explicitly lets the Contracts and Market Analysis Branch Manager consider other factors — irrevocable lines of credit, officer loans to the company, or that same bonding-capacity letter — before denying prequalification. Falling short on one ratio is a conversation to have with your surety before you apply, not a reason to skip bidding.