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On May 7, 2026, the Colorado legislature enacted HB 26-1311, Concerning the Use of a Bond in Lieu of Retainage In Construction Contracts (the “Retainage Bond Bill”), introducing a significant shift in construction payment practices with respect to retainage. Specifically, the Retainage Bond Bill expressly permits parties to a private construction contract in Colorado to replace retained funds, which are typically withheld until project completion as security for a party’s performance, with a retainage bond. While this framework may improve liquidity in certain circumstances, it also changes the standard risk allocation for construction projects that has long guided the industry. For contractors, the Retainage Bond Bill raises several concerns, including that it reduces the effectiveness of retainage as leverage for subcontractor performance and replaces a cash-based security mechanism with a surety claim process that may be slower and more complex.
Traditionally, owners or upstream contractors could withhold, as retained funds, up to 5% of the money earned by a contractor or subcontractor for work performed, provided the contract was over $150,000. The Retainage Bond Bill provides another option for performance security, a retainage bond. A retainage bond is a financial guarantee issued by a surety that ensures a party’s work is complete and meets the required standards. With the retainage bond ensuring performance, the paying party (i.e., owner or contractor) will pay the performing party (i.e., contractor or subcontractor) the full amount of earned funds during the project’s course, instead of waiting until substantial or final completion. As such, a contractor (or subcontractor) that provides a retainage bond will receive full payment as it performs the work and the owner (or contractor) must look to the surety backing the bond for correction or completion of the work in the event of a default. The Retainage Bond Bill formalizes this arrangement in Colorado, expressly permitting contractors and subcontractors to substitute a surety retainage bond for withheld retainage in their contracts.
Colorado’s HB 26-1311 does more than introduce retainage bonds; it establishes specific rights, obligations, and guardrails governing their use across construction contracts. Contractors and subcontractors may elect to provide a retainage bond instead of having funds retained. The bond amount is capped at 5% of the money earned by the contractor or subcontractor, and the upstream party is required to accept the bond and release the corresponding retainage if the bond meets the statutory criteria.
For a retainage bond to qualify, the bond must guarantee that: 1) the contractor or subcontractor will faithfully perform all the provisions of the contract or subcontract; and 2) they will pay all the laborers, suppliers, and subcontractors owed under the contract or subcontract.
Additionally, the owner (or upstream party) may require that the issuing surety have a minimum A.M. Best or successor institution financial strength rating. The minimum rating cannot exceed A-. If a contractor furnishes a retainage bond that causes the release of a subcontractor’s retained funds, the contractor may withhold the subcontractor’s portion of the bond premium.
Furthermore, if an owner accepts a retainage bond from a contractor, the contractor is required to accept equivalent retainage bonds from its subcontractors. In turn, the contractor may require that a subcontractor furnish an equivalent bond if it has elected to provide a retainage bond to the owner.
Contractors often use retainage to enforce subtrade performance by leveraging retained funds as incentive for the completion of their scope. Contractors may also apply retainage to cover costs to complete defective or outstanding work that a subcontractor failed to complete or performed incorrectly. Under the Retainage Bond Bill, contractors who have received retainage bonds from their subcontractors will have to file bond claims against the sureties to cover costs and damages arising from a subcontractor’s deficient performance, potentially delaying completion of unfinished scope or correction of defects. In some cases, the surety claims process may be slower and more complex than a typical subtrade dispute, and may require arbitration to resolve.
Additionally, the Retainage Bond Bill could negatively impact a project’s cost structure and risk allocation. Because subcontractor retainage is often used to offset back charges and cover incomplete work, contractors may need to increase their contingency to account for such potential risks. Furthermore, the Retainage Bond Bill could create unfavorable consequences for project financing. Without the comfort of retained funds available until the project’s completion, lenders and sureties may scrutinize subcontractor risk more intensely and implement stronger control over project operations, slowing down the payment process.
The Retainage Bond Bill has several clear benefits. It enables contractors to access full payment for performance of the work, improves cash flow during the job, and arguably creates greater capacity for contractors to take on additional projects. However, because retainage flows through to subcontractors, the primary liquidity advantage accrues to downstream parties, with contractors bearing most of the risk and administrative burden.
The Retainage Bond Bill shifts security for project performance from the cash-based withholding mechanism of retainage to the surety-backed framework of a retainage bond. For contractors, this could reduce or remove altogether the established use of retainage as an enforcement mechanism while at the same time introducing additional complexity in managing subcontractor risk. As a new development, however, the actual impacts on the industry remain to be seen. BBG will continue to monitor and provide guidance as construction contract participants in Colorado adapt to this new framework.
BBG Construction Law is pleased to announce that the firm has again been ranked Band 1 for Construction Law in Colorado by Chambers and Partners.
BBG was also asked to contribute the Colorado Construction In-Depth Overview on the Chambers USA Rankings Guide. Written by David Frommel with contributions from Suzanne Wilson and Michael Cowan, read it here: https://chambers.com/legal-rankings/construction-colorado-5:15:12165:1?l=en-GB
This continued recognition reflects the sophistication of work and the confidence of BBG’s clients and industry partners, whose feedback helps inform Chambers’ highly regarded rankings of leading law firms and attorneys.
Several BBG partners also received individual recognition for their construction law practices. Buck Beltzer, Henry Bangert, and Bret Gunnell were recognized in Band 1, while David Frommell was recognized in Band 3. Their multi-year recognition highlights BBG’s depth of experience in construction litigation, dispute resolution, project counseling, and risk management for clients across Colorado’s construction industry.
BBG is grateful to its clients, colleagues, and industry partners for their continued trust and support. The firm remains committed to providing strategic, practical, and effective legal counsel to contractors, owners, developers, design professionals, and other construction industry stakeholders.
BBG Construction Law was proud to sponsor the American Arbitration Association’s 21st Annual Construction Conference, “Building Resilience: The Future of Construction Disputes and ADR in an Everchanging World.” The event brought together construction law and dispute resolution professionals to discuss emerging issues shaping construction disputes, arbitration, mediation, and alternative dispute resolution in a changing industry environment.
BBG was represented by Bret Gunnell, Kaysie Garcia, Todd Bressler, and Joe Craig, reflecting the firm’s continued commitment to supporting thought leadership, industry education, and practical solutions for complex construction disputes. As construction projects become increasingly sophisticated and risk environments continue to evolve, forums like the AAA Construction Conference provide valuable opportunities for legal, business, and industry professionals to exchange insights on resilience, dispute avoidance, and effective resolution strategies.
BBG Construction Law is pleased to welcome its 2026 Colorado Summer Law Clerk Cohort. This year’s group includes Dallin Warnick, a second-year law student at the University of Denver Sturm College of Law; Samantha Gomez, a second-year law student at the University of Colorado Law School; and Caleb Smith, a second-year law student at the University of Wyoming College of Law.
BBG’s summer law clerk program provides law students with valuable hands-on experience in construction law, litigation, dispute resolution, and transactional matters. Throughout the summer, law clerks work alongside the firm’s attorneys on real-world legal issues affecting contractors, owners, developers, design professionals, and other participants in the construction industry. The program is designed to provide practical exposure to the legal and business challenges facing the construction sector while helping students develop the skills necessary for successful legal careers.
BBG is committed to supporting the next generation of construction law professionals and is excited to have Dallin, Samantha, and Caleb join the team. The firm looks forward to their contributions and to providing meaningful opportunities for professional growth and mentorship throughout the summer.
BBG Construction Law is pleased to announce that partner Todd Bressler will be speaking at the American Arbitration Association–International Centre for Dispute Resolution (AAA-ICDR) conference on June 4, 2026, in Marina del Rey, California.
Todd will participate in the panel discussion, “Financial Risk, Insurance Challenges & Statutory Payment Claims,” which will explore key issues affecting construction industry stakeholders, including the allocation and management of financial risk, evolving insurance considerations, and statutory payment claim requirements. These topics continue to play a significant role in construction project planning, contract administration, dispute avoidance, and claims resolution.
The conference brings together construction attorneys, arbitrators, industry professionals, and dispute resolution practitioners to discuss emerging trends and challenges impacting the construction sector. Todd’s participation reflects BBG’s ongoing commitment to thought leadership and active involvement in industry organizations that shape the future of construction law and alternative dispute resolution.
The panel will be moderated by Rick Zieglowsky, VP at AAA and will provide attendees with practical insights into navigating complex financial and legal issues facing construction projects today.
BBG Construction Law’s ongoing column, Construction Law Zone, continues in the latest issue of Colorado Construction & Design® magazine with an article by Alex King titled, “Mind the Gap: What Berk v. Choy Means for Colorado Construction Professionals.”
In the article, Alex analyzes the implications of the Colorado Court of Appeals’ decision in Berk v. Choy and discusses how the ruling may affect participants across the construction industry. Court decisions can significantly influence risk allocation, project management practices, contractual relationships, and dispute resolution strategies. As a result, staying informed about developments in Colorado construction law is essential for contractors, subcontractors, developers, design professionals, and other industry stakeholders.
Through BBG’s Construction Law Zone column, the firm provides practical insights into legal developments affecting the construction community and helps industry professionals understand how evolving case law may impact their businesses and projects. Alex’s article offers readers valuable perspective on the Berk v. Choy decision and highlights key considerations for construction professionals navigating Colorado’s legal landscape.
The article appears on page 70 of the issue of Colorado Construction & Design® magazine.
BBG Construction Law is honored to be recognized by the Denver Business Journal as one of its 2026 Best Places to Work, marking the third consecutive year the firm has received this distinction.
The Best Places to Work program recognizes organizations that foster outstanding workplace cultures and employee experiences. What makes this recognition particularly meaningful is that it is based entirely on employee feedback, reflecting the commitment, collaboration, and dedication of the BBG team.
As a firm focused exclusively on construction law, BBG believes that exceptional client service begins with a strong workplace culture. The firm’s success is driven by a team-oriented environment where attorneys and staff work together to deliver practical, effective solutions for clients across the construction industry. This recognition highlights the professionalism, mutual respect, and shared commitment that define the BBG workplace.
BBG is grateful to its employees for making this achievement possible and extends congratulations to its clients, industry partners, and fellow honorees recognized by the Denver Business Journal. The firm values the strong relationships it has built throughout the construction community and remains committed to fostering a workplace where talented professionals can thrive while providing exceptional service to clients.
BBG Construction Law was proud to sponsor the Design-Build Institute of America (DBIA) Rocky Mountain Region Education Summit and support the Rocky Mountain chapter’s ongoing efforts to advance collaboration and innovation within the design-build industry.
Stephen Wichern attended the summit on behalf of BBG, joining owners, contractors, designers, and other industry professionals for a day of education, networking, and discussion focused on the evolving challenges and opportunities facing the design-build community. The event provided attendees with valuable insights into project delivery trends, industry best practices, and emerging issues impacting design-build projects throughout the Rocky Mountain region.
As a firm dedicated exclusively to serving the construction industry, BBG values opportunities to engage with organizations such as DBIA that promote collaboration, professional development, and project success. Sponsorship of the Education Summit reflects the firm’s continued commitment to supporting industry organizations and fostering strong relationships with construction and design professionals throughout the region.
BBG appreciates the work of DBIA Rocky Mountain Region in creating meaningful educational opportunities and looks forward to continued involvement with the design-build community.
BBG Construction Law is pleased to announce that Buck Beltzer has been elected Secretary of the American Bar Association Forum on Construction Law, one of the construction industry’s leading organizations dedicated to advancing education, leadership, and professional development within the practice of construction law.
Buck’s election reflects his longstanding commitment to the construction law community and his significant contributions to the Forum over many years. As Secretary, he will play an important leadership role in supporting the Forum’s mission of serving construction lawyers, industry professionals, and stakeholders through educational programming, publications, networking opportunities, and professional engagement. The Forum Secretary ascends to VP and then President of the Forum over the next three years.
The announcement was shared by Forum President and construction attorney & mediator Kristine Kubes, who recognized both Buck Beltzer and Michael Kamprath following their election as Forum officers. Her comments highlighted Buck’s leadership, service, and dedication to the organization over the course of his career.
BBG congratulates Buck on this well-deserved achievement and looks forward to his continued leadership within the American Bar Association Forum on Construction Law. His election further reflects BBG’s commitment to active involvement in organizations that help shape the future of construction law and support excellence throughout the industry.
BBG Construction Law was proud to sponsor the Colorado Real Estate Journal’s 2026 Development, Construction & Design Conference and Expo, one of the region’s premier events for professionals involved in real estate development, construction, design, and related industries.
Representing BBG at the conference, Lacey Shirley connected with industry leaders, developers, contractors, design professionals, and other stakeholders to discuss current trends, challenges, and opportunities shaping Colorado’s built environment. The event provided a valuable forum for networking, education, and collaboration among professionals who play a critical role in the planning and execution of development and construction projects throughout the state.
As a law firm dedicated exclusively to the construction industry, BBG values opportunities to engage with organizations and events that support innovation, professional development, and strong industry relationships. Sponsoring the conference reflects the firm’s ongoing commitment to serving Colorado’s construction and real estate communities and staying connected to the issues that matter most to its clients.
BBG appreciates the Colorado Real Estate Journal’s efforts in bringing together professionals from across the industry and looks forward to continuing its involvement in events that foster collaboration and industry growth.
BBG Construction Law is proud to celebrate its ninth anniversary, marking nearly a decade of serving clients throughout the construction industry and supporting projects that help shape communities across the region.
Since its founding, BBG has remained committed to providing practical, strategic legal counsel tailored to the unique needs of contractors, subcontractors, owners, developers, design professionals, and other construction industry stakeholders. Over the past nine years, the firm has grown alongside its clients, building lasting relationships and earning a reputation for delivering high-quality legal services across all phases of construction projects, from contract negotiation and project counseling to dispute resolution and litigation.
This milestone reflects the trust clients place in BBG, the strong partnerships the firm has developed throughout the industry, and the dedication of the attorneys and staff who contribute to the firm’s success every day. BBG is grateful for the opportunity to work with outstanding clients, industry organizations, and business partners who have been part of the firm’s journey.
As BBG looks ahead, the firm remains focused on its mission of serving the construction industry with excellence, fostering meaningful relationships, and helping clients successfully navigate the challenges and opportunities that lie ahead.
