HOUSE AMENDED
PRIOR PRINTER'S NOS. 1662, 1766 PRINTER'S NO. 1894
No. 1323 Session of 1982
INTRODUCED BY O'CONNELL, ROMANELLI, STOUT, LOEPER, JUBELIRER,
RHOADES, EARLY AND SCANLON, FEBRUARY 5, 1982
AS REPORTED FROM COMMITTEE ON STATE GOVERNMENT, HOUSE OF
REPRESENTATIVES, AS AMENDED, MAY 3, 1982
AN ACT
1 Amending the act of November 26, 1978 (P.L.1309, No.317),
2 entitled "An act regulating the awarding and execution of
3 certain public contracts; providing for contract provisions
4 relating to the retention, interest, and payment of funds
5 payable under the contracts; and repealing inconsistent
6 acts," regulating retainage and interest.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Section 5, act of November 26, 1978 (P.L.1309,
10 No.317), referred to as the Public Works Contract Regulation
11 Law, is amended to read:
12 Section 5. Contract provision for retainage.
13 (a) A public contract may include a provision for the
14 retainage of a portion of the amount due the contractor to
15 insure the proper performance of the contract, except that the
16 sum or sums withheld by the contracting body from the contractor
17 shall not exceed 10% of the amount due the contractor until 50%
18 of the contract is completed. When the contract is 50%
19 completed, one-half of the amount retained by the contracting
1 body shall be returned to the contractor. The sum or sums
2 withheld by the contracting body from the contractor after the
3 contract is 50% completed shall not exceed 5% of the [amount due <--
4 the contractor on the remaining work] ORIGINAL CONTRACT AMOUNT: <--
5 Provided, however, That in the event a dispute arises between
6 the contracting body and any prime contractor, which dispute is
7 based upon increased costs claimed by one prime contractor
8 occasioned by delays or other actions of another prime
9 contractor, additional retainage in the sum of one and one-half
10 times the amount of any possible liability may be withheld until
11 such time as a final resolution is agreed to by all parties
12 directly or indirectly involved, unless the contractor causing
13 the additional claim furnishes a bond satisfactory to the
14 contracting body to indemnify such contracting body against the
15 claim. However, all such moneys retained by the contracting body
16 may be withheld from the contractor until substantial completion
17 of the contract.
18 (b) Notwithstanding subsection (a), when the Department of
19 General Services is the contracting body, the department's
20 public contract may include a provision for the retainage of a
21 portion of the amount due the contractor to insure the proper
22 performance of the contract, except that the sum or sums
23 withheld by the department from the contractor shall not exceed
24 6% of the then total estimates until 50% of the contract is
25 satisfactorily completed. The sum or sums withheld by the
26 department from the contractor after the contract is 50%
27 satisfactorily completed shall not exceed 3% of the original
28 contract amount.
29 Section 2. Section 8 of the act is amended to read:
30 Section 8. Interest payable on final payment.
19820S1323B1894 - 2 -
1 The final payment due the contractor from the contracting
2 body after substantial completion of the contract shall bear
3 interest at a rate of [6%] 12% 10% per annum after the date that <--
4 such payment shall become due and payable to the contractor:
5 Provided, however, That where the contracting body has issued
6 bonds to finance the project, interest shall be payable to the
7 contractor at the rate of interest of the bond issue or at the
8 rate of 12% 10% per annum, whichever is less. <--
9 Section 3. This act shall take effect in 60 days AND SHALL <--
10 BE APPLICABLE TO ALL CONTRACTS EXECUTED THEREAFTER.
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