A recently proposed bill to reduce the retainage amount for certain public work contracts to five percent and to allow a claimant to recover reasonable attorney’s fees and costs from a payment bond surety that fails to timely respond to a claim was unanimously approved by the General Assembly’s General Law Committee on March 11, 2016, and is now awaiting action by the full General Assembly. The bill, entitled “An Act Concerning Public Work Contract Retainage and Enforcement of the Right to Payment on a Bond,” amends two existing statutes, Connecticut General Statutes § 49-41b, “Release of Payments on Construction Projects,” and § 49-42, “Enforcement of Right to Payment on Bond.”
The portion of the bill amending § 49-41b provides that under any contract awarded by the Connecticut Department of Administrative Services or any other state agency, except for the Department of Transportation, the agency may not withhold more than five percent retainage, which is a reduction from the ten percent cap on retainage under existing law. Similar to the present version of the statute, the five percent cap also applies to retainage withheld by general contractors from payments to subcontractors. The bill preserves the existing two and one half percent retainage cap for contracts awarded by the Department of Transportation, as well as the five percent retainage cap for municipal contracts.
The portion of the bill amending Connecticut General Statutes § 49-42, which is part of Connecticut’s “Little Miller Act,” provides an additional right to claimants when the payment bond surety fails to pay the claim in a timely manner. Under...
