TX SB776

Prohibits governmental construction contracts from containing provisions that bar contractors from receiving compensatory damages for delays caused solely by the governmental entity or parties the government is responsible for

Defines compensatory damages as actual costs incurred due to schedule delays that could not be reasonably mitigated, excluding special damages, consequential damages, most home office overhead, profit/markup on indirect costs, and unrelated indirect costs

Applies to contracts with state agencies, municipalities, counties, public school districts, special-purpose districts, courts, higher education institutions, and legislative/judicial agencies

Allows governmental entities to include contract provisions requiring notice, justification, mitigation duties, and proof of actual costs before contractors can recover delay damages

Exempts natural disaster residential repair contracts and transportation department contracts; provisions cannot be waived and any attempted waiver is void; effective September 1, 2025