Sec. 49-41b. Release of payments on construction projects.

422 words·~2 min read·/ct/title-49/chapter-847-liens/49-41b

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

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)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)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)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.