A general contractor (IT-Davy) sued the Texas Natural Resource Conservation Commission for breach of contract after the state agency refused to pay for completed work. The Texas Supreme Court ruled that sovereign immunity—a legal doctrine protecting state agencies from lawsuits—blocked the contractor's case. The court found that neither the contractor's performance, the contract language, nor state law waived the agency's immunity. This means contractors cannot sue state agencies for contract disputes unless the state legislature explicitly allows it.
Never assume you can sue a state agency for breach of contract. Sovereign immunity blocks most contractor claims unless state law explicitly permits suit.
Contract terms, arbitration clauses, and 'equitable adjustment' language do not waive a state agency's sovereign immunity. Get written legislative consent before signing.