[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR32.103]



[Page 649-650]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 32_CONTRACT FINANCING--Table of Contents

 

           Subpart 32.1_Non-Commercial Item Purchase Financing

 

Sec. 32.103  Progress payments under construction contracts.



    When satisfactory progress has not been achieved by a contractor 

during any period for which a progress payment is to be made, a 

percentage of the progress payment may be retained. Retainage should not 

be used as a substitute for good contract management, and the 

contracting officer should not withhold funds without cause. 

Determinations to retain and the specific amount to be withheld shall be 

made by the contracting officer on a case-by-case basis. Such decisions 

will be based on the contracting officer's assessment of past 

performance and the likelihood that such performance will continue. The 

amount of retainage withheld shall not exceed 10 percent of the approved 

estimated amount in accordance with the terms of the contract and may be 

adjusted as the contract approaches completion to recognize better than 

expected performance, the ability to rely on alternative safeguards, and 

other



[[Page 650]]



factors. Upon completion of all contract requirements, retained amounts 

shall be paid promptly.



[51 FR 19716, May 30, 1986, as amended at 60 FR 49711, Sept. 26, 1995]