A. Any county, city, town or agency thereof or other political subdivision of the Commonwealth when contracting directly with contractors for public contracts of $200,000 or more for construction of highways, roads, streets, bridges, parking lots, demolition, clearing, grading, excavating, paving, pile driving, miscellaneous drainage structures, and the installation of water, gas, sewer lines and pumping stations where portions of the contract price are to be retained, shall include in the Bid Proposal an option for the contractor to use an escrow account procedure for utilization of the political subdivision's retainage funds by so indicating in the space provided in the proposal documents. In the event the contractor elects to use the escrow account procedure, the escrow agreement form included in the Bid Proposal and Contract shall be executed and submitted to the political subdivision within fifteen calendar days after notification. If the escrow agreement form is not submitted within the fifteen-day period, the contractor shall forfeit his rights to the use of the escrow account procedure.
B. In order to have retained funds paid to an escrow agent, the contractor, the escrow agent, and the surety shall execute an escrow agreement form. The contractor's escrow agent shall be a trust company, bank or savings institution with its principal office located in the Commonwealth. The escrow agreement and all regulations adopted by the political subdivision entering into the contract shall be substantially the same as that used by the Virginia Department of Transportation.
C. This section shall not apply to public contracts for construction for railroads, public transit systems, runways, dams, foundations, installation or maintenance of power systems for the generation and primary and secondary distribution of electric current ahead of the customer's meter, the installation or maintenance of telephone, telegraph or signal systems for public utilities and the construction or maintenance of solid waste or recycling facilities and treatment plants.
D. Any such public contract for construction with a county, city, town or agency thereof or other political subdivision of the Commonwealth, which includes payment of interest on retained funds, may require a provision whereby the contractor, exclusive of reasonable circumstances beyond the control of the contractor stated in the contract, shall pay a specified penalty for each day exceeding the completion date stated in the contract.
E. Any subcontract for such public project that provides for similar progress payments shall be subject to the provisions of this section.
1989, c. 1, § 11-56.1; 2001, c. 844.
Structure Code of Virginia
Title 2.2 - Administration of Government
Chapter 43 - Virginia Public Procurement Act
§ 2.2-4300. Short title; purpose; declaration of intent
§ 2.2-4302.1. Process for competitive sealed bidding
§ 2.2-4302.2. Process for competitive negotiation
§ 2.2-4303. (Effective until July 1, 2023) Methods of procurement
§ 2.2-4303. (Effective July 1, 2023) Methods of procurement
§ 2.2-4303.01. High-risk contracts; definition; review
§ 2.2-4303.1. Architectural and professional engineering term contracting; limitations
§ 2.2-4303.2. Job order contracting; limitations
§ 2.2-4304. Joint and cooperative procurement
§ 2.2-4305. Competitive procurement by localities on state-aid projects
§ 2.2-4308.1. Purchase of owner-controlled insurance in construction projects
§ 2.2-4309. Modification of the contract
§ 2.2-4310.1. Awards as a result of any authorized enhancement or remedial measure; requirements
§ 2.2-4310.2. Executive branch agency's goals for participation by small businesses; requirements
§ 2.2-4310.3. Fiscal data pertaining to certain enhancement or remedial measures
§ 2.2-4311. Employment discrimination by contractor prohibited; required contract provisions
§ 2.2-4312. Drug-free workplace to be maintained by contractor; required contract provisions
§ 2.2-4313. Petition for recycled goods and products; periodic review of procurement standards
§ 2.2-4315. Use of brand names
§ 2.2-4316. Comments concerning specifications
§ 2.2-4317. Prequalification generally; prequalification for construction
§ 2.2-4318. Negotiation with lowest responsible bidder
§ 2.2-4319. Cancellation, rejection of bids; waiver of informalities
§ 2.2-4320. Exclusion of insurance bids prohibited
§ 2.2-4321.2. Public works contracts; project labor agreements authorized
§ 2.2-4321.3. Payment of prevailing wage for work performed on public works contracts; penalty
§ 2.2-4322. Acceptance of bids submitted to the Department of Transportation
§ 2.2-4323. Purchase programs for recycled goods; agency responsibilities
§ 2.2-4323.1. Purchase of flags of the United States and the Commonwealth by public bodies
§ 2.2-4324. Preference for Virginia products with recycled content and for Virginia firms
§ 2.2-4325. Preference for Virginia coal used in state facilities
§ 2.2-4326. Preference for recycled paper and paper products used by state agencies
§ 2.2-4327. Preference for community reinvestment activities in contracts for investment of funds
§ 2.2-4328. Preference for local products and firms; applicability
§ 2.2-4328.1. Preference for energy-efficient and water-efficient goods
§ 2.2-4328.2. Purchase of personal protective equipment by state agencies
§ 2.2-4329.1. Energy forward pricing mechanisms
§ 2.2-4330. Withdrawal of bid due to error
§ 2.2-4331. Contract pricing arrangements
§ 2.2-4332. Workers' compensation requirements for construction contractors and subcontractors
§ 2.2-4333. Retainage on construction contracts
§ 2.2-4336. Bid bonds; construction contracts
§ 2.2-4337. Performance and payment bonds
§ 2.2-4338. Alternative forms of security
§ 2.2-4339. Bonds on other than construction contracts
§ 2.2-4340. Action on performance bond
§ 2.2-4340.1. Statute of limitations on construction contracts
§ 2.2-4340.2. Statute of limitations on architectural and engineering contracts
§ 2.2-4341. Actions on payment bonds; waiver of right to sue
§ 2.2-4342. Public inspection of certain records
§ 2.2-4343. Exemption from operation of chapter for certain transactions
§ 2.2-4343.1. Permitted contracts with certain religious organizations; purpose; limitations
§ 2.2-4344. Exemptions from competition for certain transactions
§ 2.2-4346. Other exemptions for certain transactions
§ 2.2-4349. Retainage to remain valid
§ 2.2-4350. Prompt payment of bills by state agencies
§ 2.2-4350.1. Prohibition on payment without an appropriation; prohibition on IOUs
§ 2.2-4351. Defect or impropriety in the invoice or goods and/or services received
§ 2.2-4352. Prompt payment of bills by localities
§ 2.2-4353. Date of postmark deemed to be date payment is made
§ 2.2-4354. (Effective until January 1, 2023) Payment clauses to be included in contracts
§ 2.2-4354. (Effective January 1, 2023) Payment clauses to be included in contracts
§ 2.2-4355. Interest penalty; exceptions
§ 2.2-4356. Comptroller to file annual report
§ 2.2-4358. Appeal of denial of withdrawal of bid
§ 2.2-4359. Determination of nonresponsibility
§ 2.2-4360. Protest of award or decision to award
§ 2.2-4361. Effect of appeal upon contract
§ 2.2-4362. Stay of award during protest
§ 2.2-4363. Contractual disputes
§ 2.2-4365. Administrative appeals procedure
§ 2.2-4366. Alternative dispute resolution
§ 2.2-4369. Proscribed participation by public employees in procurement transactions
§ 2.2-4370. Disclosure of subsequent employment
§ 2.2-4373. Participation in bid preparation; limitation on submitting bid for same procurement
§ 2.2-4374. Purchase of building materials, etc., from architect or engineer prohibited
§ 2.2-4375. Certification of compliance required; penalty for false statements
§ 2.2-4376. Misrepresentations prohibited
§ 2.2-4376.1. Contributions and gifts; prohibition during procurement process