Or. Admin. Code § 734-010-0430 - Retainage
(1) Withholding of
Retainage. ODOT may retain payment but shall not retain an amount in excess of
5 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 or if all Work on a subcontract is complete, upon the
Contractor's submission of Written application containing the surety's Written
approval, ODOT may, in its discretion, reduce or eliminate retainage on any
remaining progress payments. ODOT shall respond in Writing to all such
applications within a reasonable time. When the Contract Work is 97-1/2 percent
completed, ODOT 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. ODOT may at any time reinstate retainage.
Retainage shall be included in the final payment of the Contract
Price.
(2) Form of Retainage.
Unless a Contracting Agency that reserves an amount as retainage finds in
writing that accepting a bond or instrument described in part (a) or (b) of
this section poses an extraordinary risk that is not typically associated with
the bond or instrument, 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 (4)(a) of this rule;
or
(b) A surety bond deposited as
provided in subsection (4)(b) of this rule.
(3) Deposit in interest-bearing accounts.
ODOT shall deposit cash retainage in an interest-bearing account through the
State Treasurer, for the benefit of ODOT. Earnings on such account shall accrue
to the Contractor.
(4) Alternatives
to cash retainage. In lieu of cash retainage to be held by ODOT, the Contractor
may substitute one of the following:
(a)
Deposit of bonds, securities and other instruments of the character described
in ORS 279C.560(6):
(A) The Contractor may deposit bonds,
securities and other instruments with ODOT or in any bank or trust company to
be held for the benefit of ODOT. If ODOT accepts the deposit, ODOT shall reduce
the cash retainage by an amount equal to the value of the bonds, securities and
other instruments, and reimburse the excess to the Contractor. Interest or
earnings on the bonds, securities or other instruments shall accrue to the
Contractor.
(B) Bonds, securities
and other instruments deposited or acquired in lieu of cash retainage must be
of a character approved by the Director of the Oregon Department of
Administrative Services, including but not limited to:
(i) Bills, certificates, notes or bonds of
the United States.
(ii) Other
obligations of the United States or agencies of the United States.
(iii) Obligations of a corporation wholly
owned by the Federal Government.
(iv) Indebtedness of the Federal National
Mortgage Association.
(v) General
obligation bonds of the State of Oregon or a political subdivision of the State
of Oregon.
(vi) Irrevocable letters
of credit issued by an insured institution, as defined in ORS
706.008.
(C) Upon ODOT's determination that all
requirements for the protection of ODOT's interests have been fulfilled, it
shall release to the Contractor all bonds, securities and other instruments
deposited in lieu of retainage.
(b) Deposit of surety bond: ODOT, at its
discretion, may allow the Contractor to deposit a surety bond in a form
acceptable to ODOT in lieu of all or a portion of funds retained or to be
retained. ODOT requires that the first $10,000 of retainage be held as cash,
before the retainage bond takes effect. A Contractor depositing such a bond
shall accept surety bonds from its subcontractors and suppliers in lieu of
retainage. In such cases, retainage shall be reduced by an amount equal to the
value of the bond, and the excess shall be reimbursed.
(5) Recovery of costs. ODOT may recover from
the Contractor all costs incurred in the proper handling of retainage, bonds,
securities and other instruments, and surety bonds, by reduction of the final
payment.
Notes
Statutory/Other Authority: ORS 184.616, 184.619, 279A.050 & 279A.065
Statutes/Other Implemented: 701.420, ORS 279C.560 & 279C.570
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