(1) Moneys retained by a contracting agency under ORS 279C.570 (7) shall be:
(a) Retained in a fund by the contracting agency and paid to the contractor in accordance with ORS 279C.570; or
(b) At the option of the contractor, paid to the contractor in accordance with subsection (3) or (4) of this section and in a manner authorized by the Director of the Oregon Department of Administrative Services.
(2) If the contracting agency incurs additional costs as a result of the exercise of the options described in subsection (1) of this section, the contracting agency may recover such costs from the contractor by reduction of the final payment. As work on the contract progresses, the contracting agency shall, upon demand, inform the contractor of all accrued costs.
(3) The contractor may deposit bonds or securities with the contracting agency or in any bank or trust company to be held in lieu of the cash retainage for the benefit of the contracting agency. In such event the contracting agency 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 contractor in accordance with ORS 279C.570. Interest on the bonds or securities shall accrue to the contractor.
(4) If the contractor elects, the retainage as accumulated shall be deposited by the contracting agency in an interest-bearing account in a bank, savings bank, trust company or savings association for the benefit of the contracting agency. When the contracting agency is a state contracting agency, the account shall be established through the State Treasurer. Earnings on the account shall accrue to the contractor.
(5) 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.
(6) The contractor, with the approval of the contracting agency, may deposit a surety bond for all or any portion of the amount of funds retained, or to be retained, by the contracting agency in a form acceptable to the contracting agency. The bond and any proceeds therefrom shall be made subject to all claims and liens and in the same manner and priority as set forth for retainage under ORS 279C.550 to 279C.570 and 279C.600 to 279C.625. The contracting agency shall reduce the retainage in an amount equal to the value of the bond and pay the amount of the reduction to the contractor in accordance with ORS 279C.570. Whenever a contracting agency accepts a surety bond from a contractor in lieu of retainage, the contractor shall accept like bonds from any subcontractor or supplier from which the contractor has retainage. The contractor shall then reduce the retainage in an amount equal to the value of the bond and pay the amount of the reduction to the subcontractor or supplier. [2003 c.794 §148]Section: Previous 279C.528 279C.530 279C.535 279C.540 279C.545 279C.550 279C.555 279C.560 279C.565 279C.570 279C.580 279C.585 279C.590 279C.600 279C.605 Next
Last modified: August 7, 2008