CC Resolution No. 05-183
RESOLUTION NO. 05-183
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO APPROVING
ADOPTION OF METHOD TO BE USED IN FEDERAL-AID CONTRACTS TO ENSURE
PROMPT AND FULL PAYMENT OF ANY RET AINAGE KEPT BY THE PRIME
CONTRACTOR OR SUBCONTRACTOR TO ANY SUBCONTRACTOR
WHEREAS, the United States Department of Transportation (DOT) requires local
agencies to adopt a method to be used in Federal-aid contracts to ensure prompt and full payment
of any retainage kept by the prime contractor or subcontractor to any contractor, as specified in
Title 49, Parts 26.29, of the Code of FederaJ Regulations; and
WHEREAS, of the three methods to ensure prompt and full payment of any retainage
kept by the prime contractor or subcontractor to any contractor specified in Title 49, Parts 26.29,
of the Code of Federal Regulations, only the third method allows retainage to be held at all; and
WHEREAS, the City Council of the City of Cupertino has determined that it is in the
City's interest to continue to hold retainage on Federal-aid contracts even ifthe period to hold
retainage is limited by Federal regulations;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Cupertino
that the City of Cupertino will act to ensure prompt and full payment of any retainage kept by the
prime contractor or subcontractor to any contractor, in compliance with Title 49, Parts 26.29, of
the Code of Federal Regulations, by adopting the following language to be incorporated in the
provisions of Federal-aid contracts:
The agency shall hold rt!tainage from the prime contractor and shall make
prompt and regular incremental acceptances of portions, as determined by the
agency, of the contract work. and pay retainage to the prime contractor based
on these acceptances. The prime contractor, or subcontractor, shall return all
monies withheld in retention from a subcontractor within 30 days after
receiving payment for work satisfactorily completed and accepted including
incremental acceptances of portions of the contract work by the agency,
Federal regulation (49CFR26,29) requires that any delay or postponement of
payment over 30 days may take place only for good cause and with the
agency's prior written approval, Any violation of this provision shall subject
the violating prime contractor or subcontractor to the penalties, sanctions and
other remedies specified in Section 7108.5 of the Business and Professions
Code, These requirements shall not be construed to limit or impair any
contractual. administrative. or judicial remedies otherwise available to the
Resolution No, 05-183
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prime contractor or subcontractor in the event of a dispute involving late
payment or nonpayment by the prime contractor, deficient subcontract
performance, or noncompliance by a subcontractor, This provision applies to
both DBE and non-DBE prime contractors and subcontractors.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 1st day of November 2005 by the following vote:
Vote
Members of the City Council
AYES:
NOES:
ABSENT:
ABSTAIN:
Kwok, Lowenthal, Sandoval, Wang, James
None
None
None
Ci~~
ATTEST: