Public contracts: retention: architecture or engineering services

The law limits how much public entities can hold back from architects and engineers and requires payment of withheld funds soon after their services end.

What the law does ​

• Limits retention to 5% of each payment under covered contracts and amendments entered on or after January 1, 2027.
• Allows higher retention for a substantially complex, unusual project only if the public entity makes and documents a pre-bid finding and discloses the amount and rationale in bid documents.
• Requires withheld retention to be released within 60 days after the firm's contracted services are complete, even if the overall project is unfinished.

Who it affects ​

• Architects, engineers, and firms legally authorized to provide architecture or engineering services.
• State and local public entities awarding covered design-bid-build contracts.