Common use of Retainage Clause in Contracts

Retainage. State law requires that the City in a contract for a public improvement or work, other than performance of professional services, withhold from monies earned by the Contractor during the progress of the Work, a sum not to exceed 5% of the cost of the Work ("Retainage"), as a trust fund for the protection and payment of any person, mechanic, subcontractor or material men who shall perform any labor upon the contract, including the State of Washington, with respect to taxes imposed pursuant to RCW Title 82. The Retainage is held by the City pursuant to RCW 60.28.010 with the Contractor having certain options concerning the deposit or escrow of such funds. In addition, the Contractor may elect to submit a bond for all or any portion of the Retainage. After completion of the Work, other than landscaping, the Contractor may request that the City release the Retainage and sixty (60) days thereafter the City shall pay the Retainage provided there are no claims against the retained funds and the City has received from Department of Revenue, Employment Security Department and the Department of Labor and Industries certificates that all taxes, increases and penalties have been paid. In lieu of Retainage, the Contractor may substitute a bond for the purposes set forth in RCW Chapter 60.28.