26.13 - EARLY RELEASE OF RETAINED FUNDS.
26.13 EARLY RELEASE OF RETAINED FUNDS.
1. For purposes of this section:
a. "Authorized contract representative" means the person
chosen by the governmental entity or the department to represent its
interests or the person designated in the contract as the party
representing the governmental entity's or the department's interest
regarding administration and oversight of the project.
b. "Department" means the state department of transportation.
c. "Substantially completed" means the first date on which
any of the following occurs:
(1) Completion of the public improvement project or the highway,
bridge, or culvert project or when the work on the public improvement
or the highway, bridge, or culvert project has been substantially
completed in general accordance with the terms and provisions of the
contract.
(2) The work on the public improvement or on the designated
portion is substantially completed in general accordance with the
terms of the contract so that the governmental entity or the
department can occupy or utilize the public improvement or designated
portion of the public improvement for its intended purpose. This
subparagraph shall not apply to highway, bridge, or culvert projects.
(3) The public improvement project or the highway, bridge, or
culvert project is certified as having been substantially completed
by either of the following:
(a) The architect or engineer authorized to make such
certification.
(b) The authorized contract representative.
(4) The governmental entity or the department is occupying or
utilizing the public improvement for its intended purpose. This
subparagraph shall not apply to highway, bridge, or culvert projects.
2. Payments made by a governmental entity or the state department
of transportation for the construction of public improvements and
highway, bridge, or culvert projects shall be made in accordance with
the provisions of chapter 573, except as provided in this section:
a. At any time after all or any part of the work on the
public improvement or highway, bridge, or culvert project is
substantially completed, the contractor may request the release of
all or part of the retained funds owed. The request shall be
accompanied by a sworn statement of the contractor that, ten calendar
days prior to filing the request, notice was given as required by
paragraphs "f" and "g" to all known subcontractors,
sub-subcontractors, and suppliers.
b. Except as provided under paragraph "c", upon receipt
of the request, the governmental entity or the department shall
release all or part of the retained funds. Retained funds that are
approved as payable shall be paid at the time of the next monthly
payment or within thirty days, whichever is sooner. If partial
retained funds are released pursuant to a contractor's request, no
retained funds shall be subsequently held based on that portion of
the work. If within thirty days of when payment becomes due the
governmental entity or the department does not release the retained
funds due, interest shall accrue on the amount of retained funds at
the rate of interest that is calculated as the prime rate plus one
percent per year as of the day interest begins to accrue until the
amount is paid.
c. If labor and materials are yet to be provided at the time
the request for the release of the retained funds is made, an amount
equal to two hundred percent of the value of the labor or materials
yet to be provided, as determined by the governmental entity's or the
department's authorized contract representative, may be withheld
until such labor or materials are provided.
d. An itemization of the labor or materials yet to be
provided, or the reason that the request for release of retained
funds is denied, shall be provided to the contractor in writing
within thirty calendar days of the receipt of the request for release
of retained funds.
e. The contractor shall release retained funds to the
subcontractor or subcontractors in the same manner as retained funds
are released to the contractor by the governmental entity or the
department. Each subcontractor shall pass through to each lower tier
subcontractor all retained fund payments from the contractor.
f. Prior to applying for release of retained funds, the
contractor shall send a notice to all known subcontractors,
sub-subcontractors, and suppliers that provided labor or materials
for the public improvement project or the highway, bridge, or culvert
project.
g. The notice shall be substantially similar to the
following:
"NOTICE OF CONTRACTOR'S REQUEST FOR EARLY RELEASE OF RETAINED FUNDS
You are hereby notified that [name of contractor] will be
requesting an early release of funds on a public improvement project
or a highway, bridge, or culvert project designated as [name of
project] for which you have or may have provided labor or materials.
The request will be made pursuant to Iowa Code section 26.13. The
request may be filed with the [name of governmental entity or
department] after ten calendar days from the date of this notice.
The purpose of the request is to have [name of governmental entity or
department] release and pay funds for all work that has been
performed and charged to [name of governmental entity or department]
as of the date of this notice. This notice is provided in accordance
with Iowa Code section 26.13."
Section History: Recent Form
2006 Acts, ch 1017, §13, 42, 43; 2007 Acts, ch 144, §8; 2008 Acts,
ch 1031, §19
Referred to in § 26.3, 314.1