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Construction Industry United in Supporting Limiting Retainage on Construction Contracts

Yesterday, after lengthy internal discussions within AGC and among many other industry associations, a bill that will result in a fair and consistent approach to the retainage issue was discussed at the Senate Business and Transportation Committee.

At January’s Annual Business Meeting, the Legislative Committee Forum discussed at length a concept to limit retention to 5% throughout the chain of commerce. The consensus was that this would improve cash flow throughout the industry.

Dan O’Brien, AGC past president and longtime AGC board member, testified in favor of Senate Bill 405. AGC’s Legislative Committee chair, Dee Burch, also testified in support of Senate Bill 405 relating to retainage and prompt pay on projects in Oregon. This bill proposes to cap retainage for the entire chain of commerce (including owner, generals, specialties, and suppliers) at 5%.

AGC Past President Burch underscored that cash flow is a critical issue for all contractors in the chain of commerce given the current state of the commercial construction industry. Burch testified that SB 405 addresses the realities of cash flow in our industry and streamlines the process by establishing a hard and fast 5% retainage cap that everyone can understand and everyone plays by. All areas of the industry will benefit from this streamlining, including owners who are attempting to build larger and more complex projects with ever-shrinking budgets.

If you have any questions about this policy, please contact Dee Burch. For questions related to the bill itself, please contact John Rakowitz, 503-317-1781.

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