What's a Supplemental Public Works Contract?

Let's say that almost all of a public works project has been completed, but that there will be a delay before all of the remaining work of the project is completed.  That delay will cause an unreasonable delay in the release of the contractor's retainage.  

Example:  This sometimes occurs when the contract requires a period of time for the contractor to maintain landscaping that has been installed, even though everything else on the project has been completed.  

Releasing Retainage Early:  Rather than wait for all of the work to be completed before beginning the retainage release process, Washington State law has a provision that allows a public agency to establish a separate contract and release most of the retainage before all of the work is completed.

Steps for a New Contract:  Here are the steps from RCW 60.28.011(7):

1. Substantial portion of work has been completed.
2. Public agency finds there will be an unreasonable delay in completing the remaining work (not the contractor's fault).
3. With concurrence of contractor, public agency deletes from the contract the remaining work.
4. Agency accepts as complete the contract minus the deleted work.
5. Agency follows the process for release of retainage on the contract.
6. Agency and contractor enter into a new contract without advertisement or bidding.
7. The amount of the new contract for the remaining work should be for an amount equal to or less than the cost of the remaining work as was provided in the original contract.
8. When the remaining work is completed on the new or supplemental contract, the public agency establishes the final acceptance date and proceeds to release retainage consistent with how retainage is released on all public works projects.

State Law:  Here's the language from RCW 60.28.011 (7):

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.

Mike Purdy's Public Contracting Blog
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