Oregon Administrative Rules › Chapter 137 - DEPARTMENT OF JUSTICE › Division 49 - MODEL RULES GENERAL PROVISIONS RELATED TO PUBLIC CONTRACTS FOR CONSTRUCTION SERVICES › Section 137-049-0820 - Retainage

Current through Register Vol. 63, No. 7, July 1, 2024
(1) Withholding of
			 Retainage. A Contracting Agency shall not retain an amount in excess of five
			 percent of the Contract Price for Work completed. If the Contractor has
			 performed at least 50 percent of the Contract Work and is progressing
			 satisfactorily, upon the Contractor's submission of Written application
			 containing the surety's Written approval, the Contracting Agency may, in its
			 discretion, reduce or eliminate retainage on any remaining progress payments.
			 The Contracting Agency shall respond in Writing to all such applications within
			 a reasonable time. When the Contract Work is 97-1/2 percent completed, the
			 Contracting Agency may, at its discretion and without application by the
			 Contractor, reduce the retained amount to 100 percent of the value of the
			 remaining unperformed Contract Work. A Contracting Agency may at any time
			 reinstate retainage. Retainage shall be included in the final payment of the
			 Contract Price.
(2) Cash Retainage
			 - Contract Price $500,000 or Less. When the Contract Price for a Public
			 Improvement Contract is $500,000 or less, a Contracting Agency may reserve as
			 retainage from any progress payment an amount not to exceed five percent,
			 pursuant to ORS
			 279C.570(7).
			 The Contracting Agency shall hold all retained moneys in a Contracting Agency
			 fund or account, and interest is not required to accrue on the retained
			 moneys.
(3) Cash Retainage -
			 Contract Price in Excess of $500,000. When the Contract Price for a Public
			 Improvement Contract exceeds $500,000, the Contracting Agency shall, in the
			 ordinary course, deposit cash retainage in an amount not to exceed five percent
			 from any progress payment due under the Public Improvement Contract into an
			 interest-bearing escrow account, pursuant to ORS
			 279C.570(2)
			 [House Bill 2415 (2019 Oregon Laws, Chapter 486)]. The Contractor under the
			 Public Improvement Contract is entitled to receive interest on the retained
			 moneys from the date the Contractor's related payment request is fully approved
			 by the Contracting Agency until the date the retained moneys are paid by the
			 Contracting Agency to the Contractor. For purposes of this section, a payment
			 of retainage is deemed to be "paid" by a Contracting Agency when the payment is
			 transmitted to the Contractor, or otherwise applied against an obligation of
			 the Contractor under the Public Improvement Contract.
(4) Alternatives In Lieu of Cash Retainage.
			 Unless a Contracting Agency that reserves an amount as retainage finds in
			 writing that accepting bonds, securities or other instruments described in part
			 (a) of this section or a surety bond described in part (b) of this section
			 poses an extraordinary risk that is not typically associated with the bonds,
			 securities, other instruments or surety bond, as applicable, the Contracting
			 Agency, in lieu of withholding moneys from payment, shall accept from the
			 Contractor:
(a) Bonds, securities or other
			 instruments that are deposited and accepted as provided in subsection (6)(a) of
			 this rule; or
(b) A surety bond
			 deposited as provided in subsection (6)(b) of this rule.