The City is required to withhold retainage (a portion of the monies owed to the Contractor) to ensure that all public works requirements have been met per RCW 60.28.011. The amount of retainage is affected by the amount of the project and the option chosen by the Contractor.
Generally five percent (5%) of the contract amount (including taxes) is subject to retainage. RCW 60.28.011 allows for four options for placement of retained funds until they are released to the Contractor. The first option will be utilized unless the Contractor advises the Contract Specialist in writing at the time the Contractor executes the contract that it elects to use a different option and either submits a retainage bond or returns a Retainage Account Escrow Agreement signed by its designated financial institution. The Contractor’s options for placement of retained funds are as follows:
- Elect to have the retained amount held in a fund by the City.
- Elect to have the City deposit the retained amount in an interest bearing account, not subject to withdrawal until after final acceptance of the work.
- Elect to have the City place the retained amount in escrow which shall be converted into bonds and securities chosen by the Contractor and approved by the public body.
- Submit a retainage bond in the amount of 5% of the contract amount. The bond must be furnished on a bond form standardized by the City Attorney's office and issued by a surety currently authorized by the State Insurance Commissioner to do business in Washington State.