What is the maximum amount of retainage that can be withheld on Florida public projects once the project reaches 50% completion?
Correct Answer
A) 2.5%
Florida Statute 218.735 allows public entities to reduce retainage to 2.5% once a project reaches 50% completion, provided the contractor is performing satisfactorily and on schedule. This provides an incentive for good performance.
Why This Is the Correct Answer
Florida Statute 218.735 specifically allows public entities to reduce retainage from the standard 5% down to 2.5% once a construction project reaches 50% completion. This reduction is contingent upon the contractor demonstrating satisfactory performance and maintaining the project schedule. The statute was designed to improve contractor cash flow and provide an incentive for good performance on public projects. This 2.5% maximum retainage amount remains in effect for the remainder of the project duration.
Why the Other Options Are Wrong
Option B: 7.5%
7.5% exceeds the maximum allowable retainage under Florida Statute 218.735 and would be an illegal amount to withhold on public projects at any stage of completion.
Option C: 10%
5% is the standard retainage amount that can be withheld during the first 50% of project completion, but once the project reaches 50% completion with satisfactory performance, the retainage must be reduced to 2.5%.
Memory Technique
Think 'Half and Half-again': 50% completion triggers retainage reduction to half of the standard 5%, which equals 2.5%.
Reference Hint
Florida Statutes Chapter 218.735 - Retainage on public construction projects
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