How does retainage work on a Washington public works contract?
A Washington public body may keep no more than 5% of the moneys earned on a public work as retainage, held in trust for the contractor's claimants and the state's taxes. It is released in full 60 days after completion of the contract work, once the lien period has run and the three state releases are in.
The duties, in the library's order
| Duty | Window and section | If missed |
|---|---|---|
| Have the public body retain no more than 5% of the moneys earned, held at the contractor's option in a fund, an interest-bearing account or escrow | none setRCW 60.28.011(1), (3), (4), (9), (10), 60.28.040(5); 39.04.152(5) | no penalty statedDisputes |
| Withhold no more than 5% of the moneys a subcontractor or supplier earns on a public project, and pay it interest on that retainage at the rate you receive on your own | none setRCW 60.28.011(4), (5); 39.04.250(2) | a breach of contractDisputes |
| Be released the bonded portion of retainage within 30 days after the public body accepts a retainage bond you submit | 30 daysRCW 60.28.011(6) | a breach of contractDisputes |
| Within 30 days of a subcontractor's request made before final acceptance, give the public body a bond for the subcontractor's share of retainage, and release a subcontractor's retainage within 30 days after accepting its like bond | 30 daysRCW 60.28.011(6) | a breach of contractDisputes |
| Be paid the retainage in full 60 days after completion of all contract work, once the lien notice period has run and the DOR, ESD and L&I releases are in hand | 60 daysRCW 60.28.011(3), (7), 60.28.021, 60.28.051, 60.28.060; 39.12.040(1)(b) | a breach of contractDisputes |
What the library notes on each duty
Quoted a whole sentence at a time from the library's note on each row.
Have the public body retain no more than 5% of the moneys earned, held at the contractor's option in a fund, an interest-bearing account or escrow
RCW 60.28.011(1), (3), (4), (9), (10), 60.28.040(5); 39.04.152(5) · none set · no penalty stated
- The retainage is a trust fund for the claims of any person arising under the contract and for the state's taxes, increases and penalties under Titles 50, 51 and 82 RCW (RCW 60.28.011(1)(a)).
- The contractor chooses whether it is kept in a fund by the public body, deposited in an interest-bearing account with the interest paid to the contractor, or placed in escrow in bonds and securities the contractor chooses and the public body approves (RCW 60.28.011(4)).
- The contractor may at any time ask that retainage be reduced to 100% of the value of the work remaining (RCW 60.28.011(3)).
Withhold no more than 5% of the moneys a subcontractor or supplier earns on a public project, and pay it interest on that retainage at the rate you receive on your own
RCW 60.28.011(4), (5); 39.04.250(2) · none set · a breach of contract
- Binds the contractor and each subcontractor towards the subcontractors, sub-subcontractors and suppliers it contracts with for labor, materials or equipment on the public project (RCW 60.28.011(5)).
- The interest rate equals the rate the contractor or subcontractor receives from its own reserved funds, so it follows the option chosen for the public body's retainage under RCW 60.28.011(4) (RCW 60.28.011(5)).
Be released the bonded portion of retainage within 30 days after the public body accepts a retainage bond you submit
RCW 60.28.011(6) · 30 days · a breach of contract
- The bond may cover all or any portion of the retainage, in a form acceptable to the public body and from an authorized surety insurer; the public body may require a minimum AM Best financial strength rating no higher than A- (RCW 60.28.011(6)).
- The bond and any proceeds are subject to all claims and liens in the same manner and priority as retained percentages (RCW 60.28.011(6)).
Within 30 days of a subcontractor's request made before final acceptance, give the public body a bond for the subcontractor's share of retainage, and release a subcontractor's retainage within 30 days after accepting its like bond
RCW 60.28.011(6) · 30 days · a breach of contract
- A subcontractor may ask at any time before final formal acceptance of the project, and the contractor may withhold the subcontractor's portion of the bond premium (RCW 60.28.011(6)).
- The duty does not arise if the public body shows good cause to refuse the bond, the bond is not commercially available, or the subcontractor refuses to pay its portion of the premium and to give the contractor a like bond (RCW 60.28.011(6)).
Be paid the retainage in full 60 days after completion of all contract work, once the lien notice period has run and the DOR, ESD and L&I releases are in hand
RCW 60.28.011(3), (7), 60.28.021, 60.28.051, 60.28.060; 39.12.040(1)(b) · 60 days · a breach of contract
- The release is subject to chapter 39.12 RCW and chapter 60.28 RCW (RCW 60.28.011(3)(b)), so each affidavit of wages paid must be filed first (RCW 39.12.040(1)(b)).
- On completion of a contract over USD 35,000 the disbursing officer notifies DOR, ESD and L&I, and may pay nothing from the retainage until each certifies that the contractor's taxes, increases and penalties are paid or readily collectible (RCW 60.28.051).
- Each department has 30 days after that notice to certify any amount due, which the officer pays within 10 days (RCW 60.28.060).
- After completion of all work other than landscaping the contractor may ask for release, and 60 days later the public body releases all but 5% retained for landscaping (RCW 60.28.011(3)(a)).
What this page is, and is not
It is the section text this library holds for Washington State, read from the Revised Code of Washington and the Washington Administrative Code, among them chapter 39.12 RCW, chapter 60.04 RCW and chapter 19.122 RCW, with the window and the consequence. It is not legal advice, and it is not a substitute for reading the statutes, the contract you signed and its specifications.
Demiton does not track jobs in Washington yet. These pages set out the duties the library holds for a Washington job, so you can check your own.
No library of law is complete, and Demiton never says this one is. An obligation the library does not hold, and you did not add, is not protected. You can add your own to any job.