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New Definition of “Substantially Complex” Affects Restrictions on Retention in Construction Contracts

  • January 26, 2015

January 26, 2015

As recently discussed in DWK’s Lunchbox Webinar “Is Your Toolkit Ready for 2015?,” the rules governing retention rates for “substantially complex” public works projects have changed as of January 1, 2015.

Previously, for construction contracts entered into after January 1, 2012, retention was limited to 5% of the contract price unless, among other steps, the Board made a finding that the project is “substantially complex.” While the substantially complex exception still exists, the statute has now been amended to define “substantially complex” as a unique project that is not regularly, customarily, or routinely performed.

This new definition may differ from the Board’s findings that are currently in place, and your resolution may not be effective for contracts entered into after January 1, 2015. To ensure you are in full compliance with the amended Public Contract Code, you should review your bid documents and your processes for reaching “substantially complex” findings. If you have any questions, you should consult with an attorney.

PRACTICE AREAS
  • Construction

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