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Retainage will be released 45 days after Final Acceptance, provided that the following has occurred:
Final Acceptance cannot be issued until all requirements of the contract have been met including, but not limited to:
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“Public Work” means all work, construction, alteration, repair or improvement other than ordinary maintenance, executed at the cost of the state or any municipality (the City of Anacortes) or which is by law a lien or charge on any property therein. The term work is very inclusive, especially in conjunction with ‘construction, alteration, repair or improvement’. All work shall comply with the provisions of RCW 39.
The term contract shall mean a contract in writing for the execution of public work for a fixed or determinable amount duly awarded after advertisement and competitive bid. However, a contract which is awarded from a small work roster need not be advertised.
Examples of Public Works Contracts:
A Contractor or subcontractor working on a public works project must, at a minimum, meet the following mandatory requirements (RCW 39.04.350):
The City is required, with limited exceptions, to obtain both a Performance and a Payment bond for each public works project per RCW 39.08.010. The City requires separate Performance and Payment bonds for 100% of the contract amount furnished on bond forms standardized by the City Attorney's office.
Performance Bonds- The purpose of a performance bond is to guarantee that the Contractor shall “faithfully perform all provisions of the contract.”
Payment Bonds- The purpose of a payment bond is to guarantee that the Contractor shall “pay all laborers, mechanics and sub-contractors.”
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:
Contractors and subcontractors on public works projects, regardless of the size, are required to pay their employees the prevailing wage for the county in which the work is being done. Wages are determined by the Industrial Statistician at the Department of Labor and Industries and can be located on the department’s website. The prevailing wages established at the time of the bid opening shall be in effect for the duration of the project.
After final acceptance of any public works project over $35,000, a public agency must file a Notice of Completion with the Department of Revenue (DOR), Department of Labor and Industries (L&I), and Employment Security Department (ESD) (RCW 60.28.051).Each state agency must approve the Notice of Completion separately, at which point each agency will send a certificate of release certifying that all applicable taxes, premiums, and penalties have been paid. If DOR, L&I, or ESD report that there are unpaid taxes or fees, the agency must pay the missing amount to the state within 10 days and subtract it from the retainage (RCW 60.28.060).
For further information, please see the ESD Retainage Release FAQ.
Click here for the Washington State L&I's list of criteria to be used in determining whether a prefabricated item is "standard" or "non-standard". These criteria shall be used by the Contractor (and the Contractor's subcontractors, agents to subcontractors, suppliers, manufacturers, and fabricators) to determine coverage under RCW 39.12 and if prevailing wages apply.