§103-32.1 Contract provision for retainage; subcontractors. (a) Any public contract may include a provision for the retainage of a portion of the amount due under the contract to the contractor to insure the proper performance of the contract; provided that:
(1) The sum withheld by the procurement officer from the contractor shall not exceed five per cent of the total amount due the contractor and that after fifty per cent of the contract is completed and progress is satisfactory, no additional sum shall be withheld; provided further that if progress is not satisfactory, the contracting officer may continue to withhold as retainage, sums not exceeding five per cent of the amount due the contractor; and
(2) The retainage shall not include sums deducted as liquidated damages from moneys due or that may become due the contractor under the contract.
(b) Where a subcontractor has provided evidence to the contractor of:
(1) A valid performance and a payment bond for the project that is acceptable to the contractor and executed by a surety company authorized to do business in this State;
(2) Any other bond acceptable to the contractor; or
(3) Any other form of collateral acceptable to the contractor;
the retention amount withheld by the contractor from its subcontractor shall be the same percentage of retainage as that of the contractor. This subsection shall also apply to the subcontractors who subcontract work to other subcontractors. [L 1976, c 167, pt of §1; am L 1999, c 149, §7; am L 2000, c 222, §2]