(a) Except as otherwise provided by State law, a municipal corporation and its officers and units may not raise the defense of sovereign immunity in a court of the State in a contract action based on a written contract executed on behalf of the municipal corporation or its units by an official or employee acting within the scope of the official's or employee's authority. (b) In a contract action described in subsection (a) of this section, a municipal corporation and its officers and units are not liable for punitive damages. (c) A claim is barred unless the claimant files suit within the later of 1 year after: (1) The date on which the claim arose; or (2) The date of completion of the contract that gave rise to the claim. (d) The governing body of a municipal corporation shall make available adequate money to satisfy any final judgment, after any right of appeal is exhausted, against the municipal corporation or its officers or units in a contract action under this section. (e) (1) A municipal corporation may require, in connection with a construction contract to which the municipal corporation is a party, that a dispute regarding the terms of or performance under the contract be subject to a final, binding determination by: (i) A neutral person selected by, or under a procedure established by, the highest executive authority of the municipal corporation; or (ii) If the other party to the dispute does not accept as neutral the person selected under item (i) of this paragraph, an arbitration panel composed of: 1. One member designated by the highest executive authority of the municipal corporation; 2. One member designated by the other party to the dispute; and 3. One member to be selected by mutual agreement of the two designated members from lists submitted by the parties to the dispute. (2) Except as provided in paragraph (3) of this subsection, a municipal corporation may not require, in connection with a construction contract to which the municipal corporation is a party, that a dispute involving at least $10,000 regarding the terms of or performance under the contract be subject to a final, binding determination made by an officer or official body of the municipal corporation. (3) A municipal corporation may require, in connection with a construction contract to which the municipal corporation is a party, that questions of fact arising from a dispute involving at least $10,000 regarding the terms of or performance under the contract be subject to a determination by an officer or official body of the municipal corporation if the decision of the officer or official body is subject to judicial review on the record.
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