Public WorksQuestion 618 of 1605
On a California public works contract, after the awarding body accepts the work as complete, retention proceeds must generally be released to the prime contractor within:
a.120 days after final acceptance by the awarding body
b.90 days, with no statutory penalty for delay
c.30 days, or interest accrues at the legal rate
d.60 days after the date of completion, or a 2% per month penalty (24% annualized) may accrue on improperly withheld amounts
Explanation
Public Contract Code §7107 requires public agencies to release retention proceeds to the prime contractor within 60 days after the date of completion of the work, and primes must pay their subs within 7 days after receipt. Wrongful withholding triggers a charge of 2% per month (about 24% per year) on improperly withheld amounts, plus attorneys' fees in the resulting action. The 30-day option confuses retention release with general progress payment timing, and the 90/120-day options exceed the §7107 statutory window.
Law Reference: Public Contract Code §7107Practice all 1605 questions free — no signup required.
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