When any public work is awarded by a contract for which a payment bond is required by section 49-41 and such contract contains a provision requiring the general or prime contractor under such contract to furnish a performance bond in the full amount of the contract price, the following shall apply:

1. (1) In the case of a contract advertised by the Department of Administrative Services or any other state agency, except as specified in subdivision (2) of this section, (A) the awarding authority shall not withhold more than seven and one-half per cent from any periodic or final payment which is otherwise properly due to the general or prime contractor under the terms of such contract, provided, when fifty per cent of the contract is completed, said amount shall be reduced to five per cent, and (B) any such general or prime contractor shall not withhold from any subcontractor more than (i) seven and one-half per cent from any periodic or final payment which is otherwise due to the subcontractor, or (ii) the amount withheld by the awarding authority from such general or prime contractor under subparagraph (A) of this subdivision, whichever is less, provided, when fifty per cent of the contract is completed, said amount shall be reduced to five per cent. Payment shall be made not later than ninety days after a complete application for payment demonstrating that fifty per cent contract completion has been submitted to the awarding authority. Notwithstanding the provisions of this subdivision (1), the awarding authority shall establish an early release program with respect to periodic payments by general or prime contractors to subcontractors.
2. (2) In the case of a contract advertised by the state Department of Transportation, (A) the department shall not withhold more than two and one-half per cent from any periodic or final payment which is otherwise properly due to the general or prime contractor under the terms of such contract, and (B) any such general or prime contractor shall not withhold more than two and one-half per cent from any periodic or final payment which is otherwise due to any subcontractor.
3. (3) If the awarding authority is a municipality, (A) the municipality shall not withhold more than five per cent from any periodic or final payment which is otherwise properly due to the general or prime contractor under the terms of such contract, and (B) any such general or prime contractor shall not withhold more than five per cent from any periodic or final payment which is otherwise due to any subcontractor.

See chapter 60, part II re public building contracts.

(P.A. 77-306; P.A. 87-575, S. 2; P.A. 96-235, S. 4, 19; P.A. 98-222, S. 8; P.A. 11-51, S. 90; P.A. 13-247, S. 200; P.A. 16-104, S. 1.)

History: P.A. 87-575 reduced, from 5% to 2.5%, the maximum amount of any payment which the state may withhold under this section; P.A. 96-235 renumbered and relettered provisions of section, added new Subdiv. (1) re withholding of payments under contracts advertised by state Department of Public Works between July 1, 1996, and June 30, 1999, and applied provisions of Subdiv. (2) to contracts advertised by said department on or after July 1, 1999, or any case in which awarding authority is any other state agency, effective June 6, 1996; P.A. 98-222 amended Subdiv. (1) by deleting time period, adding provisions re “other state agency” and replacing “department” and “Commissioner of Public Works” with “awarding authority”, and amended Subdiv. (2) by replacing “Department of Public Works” with “Department of Transportation”; pursuant to P.A. 11-51, “Department of Public Works” was changed editorially by the Revisors to “Department of Construction Services” in Subdiv. (1), effective July 1, 2011; pursuant to P.A. 13-247, “Department of Construction Services” was changed editorially by the Revisors to “Department of Administrative Services” in Subdiv. (1), effective July 1, 2013; P.A. 16-104 amended Subdiv. (1) by replacing “ten per cent” with “seven and one-half per cent” and adding “provided, when fifty per cent of the contract is completed, said amount shall be reduced to five per cent,” in Subpara. (A), replacing “ten per cent” with “seven and one-half per cent” in Subpara. (B)(i) and adding provisions re amount reduced to 5 per cent when 50 per cent of contract is completed and re payment to be made not later than 90 days after complete application for payment demonstrating 50 per cent contract completion submitted to awarding authority in Subpara. (B)(ii), and amended Subdiv. (3) by making a technical change, effective July 1, 2016.