Policy 7.23

Retainage Withheld on Construction Contracts

1. Where the cost of construction services identified in the contract is over $200,000, the School District shall withhold ten percent (10%) of the payment from each progress payment made to the contractor. This 10% retainage shall continue until 50-percent completion of the construction services purchased under the contract.

1. The term "50-percent completion" means the point at which the District has expended 50 percent of the total cost of the construction services purchased as identified in the contract together with all costs associated with existing change orders and other approved additions or modifications to the construction services provided for in the contract.

2. "Construction services" means all labor, services, and materials provided in connection with the construction, alteration, repair, demolition, reconstruction, or any other improvements to real property.

3. "Contractor" means any person who contracts directly with the School Board to provide construction services.

2. After 50-percent completion, the District shall reduce to five percent (5%) the amount of retainage withheld from each subsequent progress payment made to the contractor. (After 50-percent completion, the contractor may also present a payment request for up to one-half of the retainage withheld by the District during the pre-50% portion, and this payment shall promptly be made unless there are grounds for withholding the payment under paragraphs (3)(b)(iii), (iv), or (v) below.)

3. Each contract for construction services shall provide for a list of items required to render complete, satisfactory, and acceptable the contracted construction services for each building, structure, or phase of the project. Upon completing all the construction services purchased pursuant to the contract, including all items on the list, the contractor may submit a payment request for all remaining retainage withheld.

1. If a good faith dispute exists as to whether one or more items identified on the list have been completed pursuant to the contract, the District may continue to withhold an amount not to exceed 150 percent of the total costs to complete such items (as estimated by the architect and accepted by the School District).

2. The District need not pay or process any payment request for the remaining retainage if:

1. the contractor has, in whole or in part, failed to cooperate with the District in the development of the list described in section (3);

2. the contractor has failed to perform its contractual responsibilities, if any, with regard to the development of the list;

3. the remaining retainage is the subject of a good faith dispute;

4. the remaining retainage is the subject of a claim brought pursuant to Fla. Stat. § 255.05; or

5. the remaining retainage is otherwise the subject of a claim or demand by the District or the contractor.

3. Moreover, the final payment to the contractor shall not be made until:

1. the construction project has been inspected by the architect or other person designated by the Board for that purpose;

2. the architect or other person designated by the Board for that purpose has issued a written certificate that the project has been constructed (and completed) in accordance with the approved plans and specifications and approved change orders;

3. the Board, acting on these recommendations, has accepted the project (and the Board hereby delegates to the Superintendent or designee the authority to accept the project on behalf of the Board);

4. an Occupancy Certificate has been issued.

4. Implementation of this Policy shall also be consistent with the provisions of Fla. Stat. § 218.735(8)(c)-(h) & (9) to the extent they are applicable.