Suppose a public agency has a construction project that is substantially complete except for a one year period required in the contract for the contractor to ensure that the plants and landscaping stay healthy and alive, or there is other remaining work that won't be completed for some period of time.
Must the public agency continue to hold the retainage until all of the work is done, or can most of the retainage be released before the end of the one year plant guaranty period or other remaining work?
Supplemental Contract for Remaining Work: In Washington state, there is a provision that permits a public agency to accept the project as complete, except for the remaining work, and release that retainage. The agency then enters into a separate contract, without competition, for the remaining work that includes the value of that work. When the remaining work is completed, that supplemental contract is accepted as complete and retainage that has been withheld on that new contract is released in accordance with the same provisions for release of retainage as applies to any public works project.
Washington State Law: Here's what RCW 60.28.011 (7) states:
If the public body administering a contract, after a substantial portion of the work has been completed, finds that an unreasonable delay will occur in the completion of the remaining portion of the contract for any reason not the result of a breach thereof, it may, if the contractor agrees, delete from the contract the remaining work and accept as final the improvement at the stage of completion then attained and make payment in proportion to the amount of the work accomplished and in this case any amounts retained and accumulated under this section shall be held for a period of sixty days following the completion. In the event that the work is terminated before final completion as provided in this section, the public body may thereafter enter into a new contract with the same contractor to perform the remaining work or improvement for an amount equal to or less than the cost of the remaining work as was provided for in the original contract without advertisement or bid. The provisions of this chapter are exclusive and shall supersede all provisions and regulations in conflict herewith.
Other States: Different states have different requirements for retainage release and there are different purposes attached to retainage. In some states, such as Washington, retainage is a trust fund to ensure that various parties are paid (subcontractors, suppliers, workers, state agencies for taxes and premiums). In other states, retainage is established as leverage for the public agency to ensure that the contractor faithfully performs and completes the work.
Mike Purdy's Public Contracting Blog© 2011 by Michael E. Purdy Associates, LLChttp://PublicContracting.blogspot.com
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1 comment:
RCW 60.28.011 also states
(a) After completion of all contract work other than landscaping, the contractor may request that the public body release and pay in full the amounts retained during the performance of the contract, and sixty days thereafter the public body must release and pay in full the amounts retained (other than continuing retention of five percent of the moneys earned for landscaping) subject to the provisions of chapters 39.12 and 60.28 RCW.
Which was the original question that was asked
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