Subdivision 1. Monthly payments. Unless the terms of the contract provide otherwise, a public contracting agency shall make progress payments on a public contract for a public improvement monthly as the work progresses. Payments shall be based upon estimates of work completed as approved by the public contracting agency. A progress payment shall not be considered acceptance or approval of any work or waiver of any defects therein.
Subd. 2. Retainage. (a) A public contracting agency may reserve as retainage from any progress payment on a public contract for a public improvement an amount not to exceed five percent of the payment. A public contracting agency may reduce the amount of the retainage and may eliminate retainage on any monthly contract payment if, in the agency's opinion, the work is progressing satisfactorily.
(b) The public contracting agency must release all retainage no later than 60 days after substantial completion, subject to the terms of this subdivision. If the public contracting agency reduces the amount of retainage, the contractor must reduce retainage for any subcontractors at the same rate.
(c) A contractor on a public contract for a public improvement must pay all remaining retainage to its subcontractors no later than ten days after receiving payment of retainage from the public contracting agency, unless there is a dispute about the work under a subcontract. If there is a dispute about the work under a subcontract, the contractor must pay out retainage to any subcontractor whose work is not involved in the dispute, and must provide a written statement detailing the amount and reason for the withholding to the affected subcontractor.
(d) Upon written request of a subcontractor, the public contracting agency shall notify the subcontractor of a progress payment, retainage payment, or final payment made to the contractor.
(e) After substantial completion, a public contracting agency may withhold no more than:
(1) 250 percent of the cost to correct or complete work known at the time of substantial completion; and
(2) one percent of the value of the contract or $500, whichever is greater, pending completion and submission of all final paperwork by the contractor or subcontractor. For purposes of this subdivision, "final paperwork" means documents required to fulfill contractual obligations, including, but not limited to, operation manuals, payroll documents for projects subject to prevailing wage requirements, and the withholding exemption certificate required by section 270C.66.
If the public contracting agency withholds payment under this paragraph, the public contracting agency must promptly provide a written statement detailing the amount and basis of withholding to the contractor. The public contracting agency and contractor must provide a copy of this statement to any subcontractor that requests it. Any amounts withheld under clause (1) must be paid within 60 days after completion of the work. Any amounts withheld under clause (2) must be paid within 60 days after submission of all final paperwork.
(f) As used in this subdivision, "substantial completion" shall be determined as provided in section 541.051, subdivision 1, paragraph (a). For construction, reconstruction, or improvement of streets and highways, including bridges, substantial completion means the date when construction-related traffic devices and ongoing inspections are no longer required.
(g) Withholding retainage for warranty work is prohibited. This provision does not waive any rights for warranty claims.
(h) For a project funded with federal or state aid, the public contracting agency is not required to pay that portion of the contract funded by federal or state aid until the federal or state aid payments have been received.
(i) Nothing in this section requires payment for a portion of a contract that is not complete or for which an invoice has not been submitted.
1980 c 464 s 2; 1Sp2019 c 7 art 9 s 1
Structure Minnesota Statutes
Chapters 14 - 15A — State Agencies
Chapter 15 — State Agencies In General
Section 15.001 — Application Of Laws 2005, Chapter 56, Terminology Changes.
Section 15.01 — Departments Of The State.
Section 15.012 — State Agencies; Designation By Type.
Section 15.014 — Advisory Task Forces.
Section 15.0145 — Ethnic Councils.
Section 15.039 — Effect Of Transfer Of Powers Among Agencies.
Section 15.0395 — Interagency Agreements And Intra-agency Transfers.
Section 15.053 — Use Of The National Guard Education Center At Camp Ripley.
Section 15.054 — Sale Or Purchase Of State Property; Penalty.
Section 15.057 — Publicity Representatives.
Section 15.061 — Professional Or Technical Services.
Section 15.063 — Biennial Reports; Submission.
Section 15.066 — Confirmation Of Appointments.
Section 15.08 — Commissioners Of Management And Budget And Administration; Access To Records.
Section 15.082 — Obligations Of Public Corporations.
Section 15.10 — Records Delivered To Department Heads.
Section 15.16 — Transfer Of Lands Between Departments.
Section 15.161 — Acceptance Of Federal Lands Or Buildings; Consultation With Legislative Committees.
Section 15.17 — Official Records.
Section 15.18 — Distribution Of Publications.
Section 15.185 — Mailing Lists.
Section 15.191 — Imprest Cash Funds.
Section 15.31 — State Employees, Liability Insurance, Payment Of Premiums.
Section 15.38 — Noninsurance Of State Property; Exceptions.
Section 15.39 — Employment And Economic Development Department Buildings.
Section 15.40 — Lack Of Care In Keeping State Property Safe From Fire Loss, Nonfeasance In Office.
Section 15.41 — Construction Permits, Requisites.
Section 15.411 — Public Works Contracts; No Damages For Delay Clauses.
Section 15.415 — Corrections In Transactions, Waiver.
Section 15.43 — Acceptance Of Advantage By State Employee; Penalty.
Section 15.435 — Airline Travel Credit.
Section 15.44 — Aids For Persons With Disabilities At State Meetings.
Section 15.441 — Communications Services.
Section 15.60 — Public Safety Officers; American Flag.
Section 15.61 — Employment Of Unemployed And Underemployed Persons.
Section 15.62 — Athletic Leave Of Absence.
Section 15.71 — Public Contracts; Definitions.
Section 15.72 — Progress Payments On Public Contracts; Retainage.
Section 15.73 — Alternative Form Of Retainage.
Section 15.74 — Exceptions To Application.
Section 15.75 — Contracts With Regional Organizations.
Section 15.85 — Discipline For Racial Harassment.
Section 15.86 — State Agency Actions.
Section 15.87 — Victims Of Violence.
Section 15.97 — Information And Telecommunications Institute.
Section 15.98 — Indoor Ice Facilities.
Section 15.985 — Advisory Inspections.
Section 15.0575 — Administrative Boards And Agencies.
Section 15.058 — Licensing Board Members, Compensation, Terms, Removal, Reports.
Section 15.059 — Advisory Councils And Committees.
Section 15.0591 — Representative Of Older Population.
Section 15.0593 — Agencies Created By Executive Order.
Section 15.0594 — Commissioner's Approval Required.
Section 15.0595 — Compensation And Per Diem; Source Of Funds.
Section 15.0596 — Additional Compensation From Contingent Fund Prohibited.
Section 15.0597 — Appointments To Multimember Agencies.
Section 15.0598 — Exceptions To Open Appointments.
Section 15.0599 — Registration Of Multimember Agencies.
Section 15.06 — Appointment Of Department Heads; Terms; Deputies.
Section 15.46 — Preventive Health Services For Public Employees.
Section 15.472 — Fees And Expenses; Civil Action Or Contested Case Proceeding Involving State.
Section 15.473 — Payment Of Costs And Fees.
Section 15.474 — Procedure For Award Of Fees; Contested Case.
Section 15.51 — Declaration Of Policy.
Section 15.53 — Authority To Interchange Employees.
Section 15.54 — Status Of Employees Of This State.
Section 15.55 — Travel Expenses Of Employees Of This State.
Section 15.56 — Status Of Employees Of Other Governments.
Section 15.57 — Travel Expenses Of Employees Of Other Governments.
Section 15.58 — Agreements Between Federal And Receiving Agencies.
Section 15.59 — Employee Interchange Between State And Private Industry.
Section 15.99 — Time Deadline For Agency Action.
Section 15.991 — Customer Service.