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Retainage Provision - AASHTO Subcommittee On Construction

State Do you have zero retainage? If yes, is it for all projects? Explain. Were you zero retainage prior to the DBE regulation changes? If you were at zero retainage, have you had any problems with performance, sureties, payments, etc., that you can attribute to zero retainage? Discuss. Contact Person Telephone Number
AL Yes Yes, all projects. No No problems to date. Terry McDuffle 334-242-6208
AK         Gordon Keith 907-465-5092
AZ No   No   Ron Williams 602-712-7323
AS Yes - Primes (FYI - Primes are allowed to hold up to 10% retainage on subcontracts.) Yes, all projects. Yes - Primes(FYI - Our specs permitted Primes to hold 10% on subcontracts prior to the DBE reg changes.) No, none that can be attributed to our not holding retainage. David B. Henning 501-569-2121
CA No. Caltrans contract provisions require retention   *(No)   John McMillan 916-654-2157
CO No, but we have zero retainage for subcontractors. CDOT withholds retainage only on work done completely by the Prime Contractor. There is no retainage held on work that is all or partially subcontracted, and the Prime Contractor is prohibited from withholding retainage on subcontractors. This provision applies to all projects. *(No) This provision was developed in response to the DBE regulation changes. The Prime Contractors are complaining that with zero retainage, they have a hard time getting subcontractors to return to the job for repair or cleanup work at the end of the project, if they have already been paid for their work. They are also unable to get bonds from some of the smaller subcontractors, and thus say the specification increases their risk and liability for the subcontractors' work and financial obligations. Gary Self 303-757-9592
CT No. At the present time, Connecticut withholds retainage at the rate of 2 ½ % until the project is accepted.   *(No) As a result of the proposed DBE regulation revisions, if they are published as originally written, we will reluctantly change to zero percent retainage as we believe the other options are unworkable.   Arthur W. Gruhn 860-594-2680
DE No. We retain 5% and will continue to hold retainage until the federal regulations require otherwise. Our local road building contractors are pushing us to adopt a zero retainage policy now. We will wait and see what the final regs look like and make a decision at that point. The current draft includes several options on how to handle this situation. Non of them are attractive to DelDOT. No   Rob McCleary 302-760-2179
FL Yes Yes, all jobs. No. We held retainage in the past. We changed as of 7/1/01. We only hold retainage if a contractor is more than 10% behind their schedule. Too soon to tell. We do not foresee any problems. In Florida, the prime has to give us a monthly certification that says they are paying their subs their prorated share each month unless there is a dispute and then they have to list that sub on the certification saying that there is a dispute. Gregg Xanders 850-414-5203
GA Yes Yes. We no longer hold retainage on any project. No No David Graham 404-656-5306
HI No   No   Earl Kobatake 808-831-6704
ID (Both) Idaho has either 100% progress payments with no retainage or 5% retainage per pay estimate. The contractor's bonding company generally is the one who approves 100% payment to the contractor. The majority of pay estimates to the prime contractor has no retainage. The contractor's surety has to furnish written consent for 100% payments. (Both) The contract specifications has been in effect for many years. No problems specifically. However, keep in mind that sureties generally do not pay off immediately if there is an unresolved problem between the state and contractor. Idaho, by contract language, has the right to withhold payment if the Engineer deems the state's interest are not secure. Gene Wortham 208-334-8426
IL No.   No   Gary Gould 217-782-6667
IN Yes.
0% Retainage since July 1, 2001
We hold no retainage on all of our contracts, federal aid or state. No, we held 3%. The federal regulation initiated the statute change. This just went into effect so we have had no experience with it. Tim Bertram  
IA No. We retain 3% on the first $1,000,000 for a total max. of $30,000. This has been in place for approximately 3 years. We have no plans on changing our retainage provision. *(No)   John Smythe 515-239-1503
KS Yes Yes, we use it on all projects. In general if required on Fed Aid Proj. we use the same on Kansas Funded Projects. No, we were in the process of going to zero retainage and the new requirements just pushed us along and moved it up approx. 6 months. We have had no problems. At the request of some prime contractors on striping projects either as prime or as sub-contractors we only pay for 90% of the material installed until 180 day acceptance period has run its course. Dean Testa 785-296-3576
KY Yes Yes Yes No Amos Hubbard 502-564-3730
LA Yes Years back we gave the contractors a choice to either furnish us a retainage bond or we would hold retainage. All contractors now furnish us a retainage bond on all contracts. **(Yes) Performance bonds are another issue that we require, but have not had any problem with the retainage bonds other than the contractor quit putting pressure on the Project Engineer to complete the final estimate thus causing delays in closing out projects! The problem we have with the new DBE requirements is that our FHWA has stated that DOTD will determine when the contractor must release the retainage to the DBE. James Little 225-379-1503
ME No   No   Thomas A. Doe 207-287-2759
MD No, our retainage is currently 5%. We do have a criteria by which a contractor can request a reduction in retainage based upon our evaluation of their performance. If, for example they have maintained an "A" rating for the last two years and also on their current project, they can request a reduction to zero after they have completed 15% of the current contract. *(No)   Steve McClain or Robert Harrison 410-545-0074
MA No No No No Michael McGrath 617-973-7491
MI No Not Applicable No Not applicable Gian Taneja 517-322-6181
MN Yes All projects except retainage on landscape jobs where we retain for maint. and deductions for dead or failing plants. **(Yes) We've had zero retainage for between 15 and 20 years. We've had very little, if any problems over the years. We do retain as a "backsheet," items for unacceptable work, disincentives, erodible soils, prevailing wage shortfalls, etc. These are individual retainage items, and not blanket retainages. Mike Marttila 651-205-4400
MS No   No. We were at 5% retainage but reduced to 1.5% after DBE regulation changes.   Joy F. Portera 601-359-7301
MO Yes Yes, we depend on the contract bond. If the contractor gets in trouble on the project or fails to pay bills promptly, we can begin retainage. No No. Only in effect this year. Kenneth Fryer 573-751-2806
MT Yes Yes, we use the same computer payment system to make monthly estimates on all projects. No, we just went to zero retainage as a way to get our DBE program approved last July. We have an overpayment problem on some projects where the final estimates end up having a quantity change that results the Department having set up an account to get money back to the Department particularly if the overpayment payback is in a period of low cash flow to the contractor. The larger the over payment the more the contractors complain. Also we are having more problems getting the necessary paperwork e.g. material certifications from contractors at the end of the project because they have been paid all the money that is owed them. The Department is going to go AASHTO SiteManager software for our field staffs and hopefully this will reduce substantially the amount of over payments because the pay quantities should not change from the monthly estimate to the final estimate. Even with zero retainage some contractors complain that our field staffs are not paying 100% of the quantities therefore we are holding a retainage on them even if the policy is no retainage. Gary a Gilmore 406-444-6206
NE No (1% with a max. of $25,000.00) *(No)   Claude Oie 402-479-4532
NV No, by statute we are limited to the lesser of $50,000 or 5% of the contract amount. *(No)   Mark Elicegui 775-888-7460
NH No   *(No)   Jesse J. Dennis 603-271-2571
NJ No. We withhold 5% of the first 50% of the money due. N/A N/A New Jersey does withhold 2.5% retainage (5% of the first 50% of the money due), however, we allow bonds placed in an escrow account for the amount of the retainage being held and we will then pay the retainage to the prime contractor. Mike Seigfried 609-530-3811
NM No   *(No)   Lee Onstott 505-827-5631
NY         James Tynan 518-457-6472
NC Yes NC is not withholding retainage on Federal Aid projects only. *(No) We instituted a "zero retainage" policy due solely to the DBE regulation changes. To date we have not had any problems but it is too early to tell. We made the change last year so we have not had many projects (any?) that are nearing completion. It may be a year or so before we know the real effects. Steven DeWitt 919-833-8703
ND No. Currently 4% until project is 50% completed, then it is reduced to 2%. *(No)   Cal J. Gendreau 701-328-4899
OH         Walid Gemayel 614-466-3598
OK Yes Yes. In 1995, Oklahoma passed legislation that required the Department to eliminate retainage for all future construction projects. Yes We have incorporated an "overpayment Bond" to be included in all construction project contracts. We occasionally notice that contractors loose interest in completing exceptions noted at final inspections or punchlist items to totally complete the projects, possibly due to the fact that there are no monies left to be earned. Overall, it doesn't seem to have been too detrimental. George Raymond 405-521-2561
OR No, we continue to withhold retainage funds. We have discussed going to zero retainage, but felt we could live with finaling our subcontractor work items if they request final payments - including retainage - prior to project closeout. We have not ruled out going to zero retainage if the current system does not work out. No N/A Ken Stoneman 503-986-3023
PA Yes On all projects Yes No major problems. We do tend to have problems with contractors providing us with the necessary documents to close our projects. Retainage would probably give them more incentive to comply. Amar Bhajandas 717-787-6989
RI No   *(No) To the best of my knowledge, we have always withheld retainage.   Norman P. Marzano, Jr. 401-222-2468 ext. 4312
SC Yes Yes, for all projects. No, we retained 5% up until 50% of the contract was complete and then it remained at that amount until completion of project. Have not had any problems to date. Danny Shealy 803-737-1308
SD Yes Yes, we do not have retainage on any projects. Yes No. John Forman 605-773-5155
TN No. We retain 3.5% as required by State Law; however, we are looking at actions we might want to take (zero retainage) for the next legislative session. *(No)   David Donoho 615-741-2414
TX No, our retainage is 4% or 5% depending if recycled materials are used.   No   Thomas Bohuslav 512-416-2559
UT No N/A No N/A John C. Butterfield 801-965-4111
VT No N/A No N/A Nate Danforth 802-828-2593
VA Yes Yes, unless the contractor falls more than 10% behind schedule or does not furnish a bond. No Not to date. Robert C. Edwards for C.F. Gee 804-786-2945
WA No, 5%.   No N/A Craig McDaniel 360-705-7826
WV Yes, we have zero retainage with a 102% performance bond or 2% retainage with a 100% performance bond. Once contractors found out that the cost of a 102% bond is the same as a 100% bond they all have chosen that option. No Too early to say since zero retainage has been in place only 2 months. We are concerned about potential overpayments to contractors since it seems to take longer to get check from contractor. The other concern is that without retainage there is less incentive to final project. Robert Tinney 304-558-3304
WI No   No   Rory Rhinesmith 608-274-7342
WY Yes All highway construction projects starting with the October letting. No   Mark Eisenhart 307-777-4459
47 States Resp. 19 Yes
27 No
1 Both (Idaho)
  7 Yes
39 No
1 Both (Idaho)

*(No) - Interpretation of data supplied.
**(Yes) - Interpretation of data supplied.

Updated: 02/25/2015
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