Who this applies to
Alaska's rules sit in one article of Title 36, AS 36.90.200 to 36.90.290, and that article is written for public construction and public works contracts of the state and its political subdivisions [2]. Under AS 36.90.265, it applies to a political subdivision's contract if the subdivision has entered into a written contract with the state for the state to provide funds for the project [2]. Two relationships are covered: the public owner and its prime contractor, and the prime contractor and its subcontractors [1].
On a private job, no statute caps retainage or sets a release date, so the contract governs [2].
What the rule says
Alaska does not limit how much retainage a public owner may hold. The article works on the cost of holding it and on how quickly it moves down the chain.
Interest from the owner. Under AS 36.90.250(a), the state or political subdivision pays the prime contractor interest on retainage, warranty retainage included, at the rate set in AS 45.45.010(a) [1]. Interest runs from the day a pay request is approved until the day the contractor is paid [1]. A political subdivision with a population of 500 or less is exempt from this interest [1].
Pass-down to subcontractors. Every public subcontract must carry clauses that require the prime to pay the subcontractor all retainage due within eight working days [1] after the prime receives final payment from the public owner, or after the notice period under AS 36.25.020(b) expires, whichever is later [1]. The same required clauses provide interest on retainage withheld from subcontractors and their suppliers at the same statutory rate [1].
The eight working days are the prime contractor's deadline. No section of the article names a separate deadline for the public owner's release of retainage to the prime, and the late-payment interest in AS 36.90.200 does not apply to retainage [1].
How to comply
- Prime contractors on public work. Read the pay-request approval dates in the project record; interest on the retainage the owner holds accrues from each one [1]. If the owner is a political subdivision with a population of 500 or less, that interest does not apply [1].
- Subcontract terms. Check that each subcontract on a public job contains the pass-down clause and the interest clause AS 36.90.210 requires [1].
- Subcontractors. The clock starts when the prime receives final payment from the owner, or when the AS 36.25.020(b) notice period ends if that is later; from there the prime has eight working days [1]. Working days, not calendar days, are the unit [1].
- Waivers. A contract provision that waives a provision of the article is void under AS 36.90.270 [2].
The article's full text, linked in the Sources below, and the contract documents settle how these rules fall on a particular project; this page is a summary of the statute, not a reading of any one contract.
Related
- Retainage calculator: put a dollar figure on the retainage held on each pay request.
- Retainage laws by state: Alaska's interest-and-pass-down approach beside other states' caps.