AP Badge #06: Public Works Retainage-AP Badge #6

AP Badge #6 - PowerPoint

Pdf Summary

This WASBO curriculum module explains how Washington school districts should identify and administer “public works” contracts and the related retainage requirements. Public works apply whenever a district contracts for construction, alteration, repair, or improvement (not ordinary maintenance) to district property under RCW 39.04.010. District property includes land and buildings and their built-in systems and fixtures; it excludes movable equipment, vehicles, machinery, and movable technology (summarized as: if you turned the building upside down and it would fall out, it’s not public works).<br /><br />The training emphasizes identifying public works before issuing a contract, starting work, or making payments so vendors can bid correctly, account for prevailing wage obligations and fees, and understand final payment delays due to retainage. Districts should provide vendors clear written public works requirements.<br /><br />Before paying on a public works contract, Accounts Payable must have key documentation: the contract/purchase order, the contractor’s retainage option, an approved Intent to Pay Prevailing Wages (required before any payment and for subcontractors), and a performance and payment bond for contracts over $150,000.<br /><br />Retainage is a percentage withheld from each invoice and held (in escrow or by the district) until 45 days after completion, ensuring taxes, subcontractors, and materials are paid (RCW 60.28). Requirements vary: no retainage for small works $0–$2,500; 10% for $2,500–$150,000 without a bond or 5% with a bond; over $150,000 requires a bond plus 5% retainage, or a retainage bond in lieu of retainage. AP calculates retainage on invoice totals before sales tax and may issue separate warrants (contractor payment and escrow deposit) or record retainage held as a liability.<br /><br />Retainage release requires the 45-day period, a Notice of Completion (projects over $35,000) to DOR, ESD, and L&I, wage affidavits, tax reconciliation, lien resolution, and agency release letters. If liens arise, retainage may be used to pay them in statutory priority order, and AP should coordinate with construction staff/legal counsel and the escrow bank.

Keywords

Washington public works contracts

WASBO curriculum module

RCW 39.04.010 definition

school district construction projects

retainage requirements RCW 60.28

prevailing wage intent documentation

performance and payment bond threshold $150,000

small works retainage rules

Notice of Completion filing (DOR ESD L&I)

retainage release process and lien priority