The 5% cap
O.C.G.A. 13-10-80, as amended by HB 1058 for public-works contracts executed on or after July 1, 2022, caps retainage at 5% of each progress payment.
The trap is the pre-2022 rule: 10% until the project is 50% complete. That rule was replaced. Holding 10% for the whole project also exceeds the current cap.
Worked example: a progress payment request of 240,000 dollars. Maximum retainage = 240,000 × 0.05 = 12,000 dollars. Using 10% gives 24,000 dollars, the old rate. 6,000 dollars is 2.5% and 2,400 dollars is 1%; neither is the cap.
Paying the retainage at substantial completion
At substantial completion, the owner must pay the retainage within 30 days after the invoice and required documents (13-10-80). Keep the other deadlines apart:
- 10 days is the Prompt Pay Act period for a contractor paying its subcontractors, 13-11-4(b). A 10-day retainage pass-through under 13-10-80 was refuted.
- 15 days is the Prompt Pay Act owner-payment period, 13-11-4(a).
- 45 days is not a deadline at all. It is a project-duration exclusion in 13-10-80.
Holding back for incomplete items: 200%
At substantial completion, 13-10-80 lets the owner hold back 200% of the value of each incomplete item. The 200% is not a retainage rate; the 5% rate governs progress payments, not incomplete items.
Worked example: three punch-list items worth 7,500 dollars combined. Maximum holdback = 7,500 × 2.00 = 15,000 dollars. 7,500 dollars is only 100%; 375 dollars wrongly applies 5%; 22,500 dollars is 300%, over the limit.
Projects the section excludes
O.C.G.A. 13-10-80 does not apply to:
- DOT road and highway contracts
- projects under 150,000 dollars
- projects under 45 days
A 400,000-dollar county library renovation running 9 months is covered. A DOT highway resurfacing contract, a 120,000-dollar restroom project, and a 300,000-dollar project scheduled for 30 days are each excluded. The trap on the last one: a high value does not save a project that runs under 45 days.