SB 1205 provides that, for contracts under the design-bid-build method that a public agency enters into on or after January 1, 2027, with an individual, firm, partnership, corporation, association, or other legal entity permitted by law to practice the profession of architecture or engineering, any retention payments to the firm for services shall not exceed 5 percent of the payment, unless there is a finding prior to bid during a properly noticed and normally scheduled public hearing, that the project is substantially complex and therefore requires a retention amount higher than 5 percent and the bid documents explain the basis for the finding and the actual retention amount. SB 1205 further provides that any withheld retention must be released no later than 60 days after completion of the firm’s services under the contract, regardless of whether the project for which the services were provided has been completed.
SB 1205 adds section 7204 to the Public Contract Code.
