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Local Assistance Procedures Manual EXHIBIT 9-B <br />Local Agency DBE Annual Submittal Dorm <br />(Attachment) <br />Prompt Payment of Withheld Funds to <br />Subcontractors <br />Federal regulation (49 CFR 26.29) requires one of the following three methods be used in federal -aid contracts <br />to ensure prompt and full payment of any retainage kept by the prime contractor or subcontractor to a <br />subcontractor. <br />Please check the box of the method chosen by the local agency to ensure prompt and full payment of <br />any retainage. <br />Method 1: No retainage will be held by the agency from progress payments due to the prime <br />contractor. Prime contractors and subcontractors are prohibited from holding retainage from <br />subcontractors. Any delay or postponement of payment may take place only for good cause and with <br />the agency's prior written approval. Any violation of these provisions shall subject the violating <br />contractor or subcontractor to the penalties, sanctions, and other remedies specified in Section 7108.5 <br />of the California Business and Professions Code. This requirement shall not be construed to limit or <br />impair any contractual, administrative orjudicial remedies, otherwise available to the contractor or <br />subcontractor in the event of a dispute involving late payment or nonpayment by the contractor, <br />deficient subcontractor performance and/or noncompliance by a subcontractor. This clause applies to <br />both DBE and non -DBE subcontractors. <br />Method 2: No retainage will be held by the agency front progress payments due to the prime <br />contractor. Any retainage kept by the prime contractor or by a subcontractor must be paid in full to the <br />earning subcontractor in 30 days after the subcontractor's work is satisfactorily completed. Any delay <br />or postponement of payment may take place only for good cause and with the agency's prior written <br />approval. Any violation of these provisions shall subject the violating contractor or subcontractor to <br />the penalties, sanctions, and remedies specified in Section 7108.5 of the California Business and <br />Professions Code. This requirement shall not be construed to limit or impair any contractual, <br />administrative orjudicial remedies, otherwise available to the contractor or subcontractor in the event <br />of a dispute involving late payment or nonpayment by the contractor, deficient subcontractor <br />performance and/or noncompliance by a subcontractor. This clause applies to both DBE and non -DBE <br />subcontractors. <br />© Method 3: The agency shall hold retainage from the prime contractor and shall make prompt and <br />regular incremental acceptances of portions, as determined by the agency of the contract work and pay <br />retainage to the prime contractor based on these acceptances. The prime contractor or subcontractor <br />shall return all monies withheld in retention from all subcontractors within 30 days after receiving <br />payment for work satisfactorily completed and accepted including incremental acceptances of portions <br />of the contract work by the agency. Any delay or postponement of payment may take place only for <br />good cause and with the agency's prior written approval. Any violation of these provisions shall <br />subject the violating prime contractor to the penalties, sanctions, and other remedies specified in <br />Section 7108.5 of the California Business and Professions Code. This requirement shall not be <br />construed to limit or impair any contractual, administrative orjudicial remedies otherwise available to <br />the contractor or subcontractor in the event of a dispute involving late payment or nonpayment by the <br />contractor; deficient subcontractor performance and/or noncompliance by a subcontractor. This clause <br />applies to both DBE and non -DBE subcontractors. <br />Page 9-3 <br />LPP 14-01 July 9, 2014 <br />