Relating to the award of compensatory damages caused by certain delays under governmental construction contracts.

SB 776 modifies Texas law to allow contractors to seek compensatory damages when government delays cause project setbacks. It defines "compensatory damages" as actual costs incurred due to delays the contractor couldn't reasonably mitigate (excluding profit, overhead, or special damages), and prohibits government contracts from banning such claims for delays caused solely by the government or its responsible parties. The bill affects contractors working on government construction projects and government entities (like cities, counties, or school districts) entering these contracts, while allowing contracts to still require contractors to provide notice or prove damages. It does not apply to disaster recovery projects or certain transportation contracts, and cannot be waived by contractors. The law takes effect September 1, 2025.