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
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§ionNum=7201
--CN