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What is the maximum retention allowed on public construction projects in California

CaliforniaRetainage
Tom Brower
AR/Office Manager at Lovco Construction

Recently noted on a new contract that the max retention allowed on a public project in CA is 5%. Trying to confirm this. Thank you

1 reply

Generally speaking, this is correct. If the work is determined to be substantially complex by the public entity, the director of the department can require a higher percentage of retainage. Specifically, AB 92 back in 2017 extended from January 1, 2018, to January 1, 2023, the sunset date on existing statutes limiting to 5% the amount of money a public agency may retain on a public works project. In order to utilize this exception, the public entity would have to deem that a project is substantially complex during a properly noticed and regularly scheduled public meeting prior to bidding the project. Whether a project is "substantially complex" must be analyzed and approved on a project-by-project basis and the designated retention amount must be included in the project’s bid documents.

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PCC&sectionNum=7201

--CN

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