(1) When a contractor on a public contract deposits bonds or securities under ORS 279C.560 (3), if the subcontract price exceeds $50,000 and constitutes more than 10 percent of the cost of the public contract, a subcontractor on the public contract may deposit bonds or securities with the contractor or in any bank or trust company to be held in lieu of cash retainage for the benefit of the contractor. In such event the contractor shall reduce the retainage in an amount equal to the value of the bonds and securities and pay the amount of the reduction to the subcontractor in accordance with ORS 701.420 and 701.430. Interest on such bonds or securities shall accrue to the subcontractor.
(2) When a contractor on a public contract elects to have the public contracting agency deposit the accumulated retainage in an interest-bearing account under ORS 279C.560 (4), the contractor, within 30 days following payment of the final amount due for construction of the public improvement, shall pay to each subcontractor who performed work on the construction the subcontractor’s proportional share of the interest earnings that accrued to the contractor as a result of that election. A subcontractor’s share of the total amount of interest earnings under this subsection shall be determined by the proportion which the amount of retainage withheld from the subcontractor bears to the amount of retainage withheld from the contractor and the length of time the retainage was withheld from the subcontractor. A share of the interest earnings shall be paid to a subcontractor under this subsection only when:
(a) Retainage is withheld from the subcontractor for more than 60 days after the day on which the first partial payment was due the subcontractor under the terms of the subcontract; and
(b) The amount of interest earnings due the subcontractor exceeds $100.
(3) If the contractor incurs additional costs as a result of the exercise of the options described in subsections (1) and (2) of this section, the contractor may recover such costs from the subcontractor by reduction of the final payment. As work on the subcontract progresses, the contractor shall, upon demand, inform the subcontractor of all accrued additional costs.
(4) Bonds and securities deposited or acquired in lieu of retainage, as permitted by this section, shall be of a character approved by the Director of the Oregon Department of Administrative Services, including but not limited to:
(a) Bills, certificates, notes or bonds of the United States.
(b) Other obligations of the United States or its agencies.
(c) Obligations of any corporation wholly owned by the federal government.
(d) Indebtedness of the Federal National Mortgage Association. [1977 c.767 §2; 1983 c.690 §16; 2003 c.794 §320]
Note: See note under 701.410.
Section: Previous 701.345 701.348 701.350 701.355 701.410 701.420 701.430 701.435 701.440 701.500 701.505 701.510 701.515 701.525 701.530 NextLast modified: August 7, 2008