It should be 5% --- that is the maximum a public entity can generally withhold from a direct contractor.
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Sep 17, 2019
The general rule for retainage on California public projects is that no more than 5% of retainage can be withheld. As for subcontracts on public projects, the rule is that retention may also be withheld, but it can't exceed the rate established in the contract between the public body and the general contractor.
It's important to mention that 5% is the "general rule." That's because California retainage laws do allow for the withholding of more than 5% under certain circumstances. If the public entity decides that the project is "substantially complex" prior to the bid. This is a tough pill to swallow, as there is no actual definition of what constitutes substantially complex. However, if that's the case, the public entity must include both the reasoning and the rate within the bid documents, before accepting any offers.
For further information, this article should prove helpful: California Retainage Laws | A Guide to Public & Private Projects.