Who this applies to
The Idaho rule is part of the public works bonding statute, Idaho Code § 54-1926 [2]. Its retainage limit applies where a public body requires a performance bond or payment bond in excess of 50% [2] of the total contract amount. The same section requires performance and payment bonds of at least 85% [2] of the contract amount on public works contracts of $50,000 [2] or more.
The limit protects two tiers: the contractor, against the public body, and the subcontractor, against the contractor [2].
Private work is not what this statute addresses. This page covers public work only, and on a private job the contract and a lawyer are where the retainage terms get answered.
What the rule says
The ceiling. A public body that requires a bond above the 50% [2] threshold may not withhold from the contractor or subcontractor more than 5% [2] of the total amount payable as retainage. A contractor is held to the same 5% [2] in what it withholds from a subcontractor.
Release in stages. The section does not make the contractor wait for the end of the job. Retainage for any portion of the project that the public body and the contractors accept as complete is released within 30 days [2] after that acceptance. Down the chain, a contractor pays a subcontractor's retainage within 30 days [2] after the subcontract is completed.
Interest. A companion statute, Idaho Code § 67-2302, makes interest run on retained amounts owed by the state or a tax-supported taxing district starting 30 calendar days [1] after the contractor completes the work, unless the contract provides otherwise [1].
How to comply
- Confirm whether the contract requires a performance or payment bond above 50% [2] of the contract amount; the 5% [2] ceiling depends on it.
- Compare the retainage clause in the prime contract, and in each subcontract, with 5% [2] of the total amount payable.
- When a portion of the work is accepted as complete, date the acceptance. The 30-day [2] release period runs from that date, for that portion.
- A subcontractor can measure its own 30 days [2] from the completion of its subcontract.
- Read the payment terms for any clause on interest; § 67-2302 lets the contract provide otherwise [1].
What this page gives is the rule as the statute states it. Whether it reaches a particular contract is a question for the contract, the sections linked below and a lawyer.
What changed recently
Section 54-1926 was added in 1965, ch. 28, and last amended in 2017, ch. 197, sec. 3 [2].
Related
- Retainage calculator: check the dollar value of a holdback against the amount payable.
- Retainage laws by state: Idaho's public works rule beside other states.