Recent changes to Georgia law favor contractors in public works construction contracts. Before revisions to the statute took effect on July 1, 2022, Georgia law allowed government entities to withhold 10% of each progress payment as retainage for the public works project, with provisions for the possible reduction of retainage after completion of 50% of the work. Due to statutory changes, retainage for contracts entered into on or after July 1, 2022 is now capped at a maximum of 5% of each progress payment. O.C.G.A. §13-10-80(b).
Contractors should also be aware of changes to punch list retainage. For contacts before July 1, 2022, the government entity was authorized to withhold 200% of the value of any “minor work” left after substantial completion of the project. The revisions to the statute remove the “minor work” language, meaning the government entity can withhold 200% of the value of any work that remains unfinished after substantial completion.
The retainage requirements still do not apply to (1) GDOT contracts for the construction, improvement, or maintenance of roads and (2) public works contracts lasting less than 45 days or under $150,000.
Please contact us if you have questions concerning a public works contract, or how the changes in the law affect you.
