In late 2024, we were approached by a large majority of our subcontractor and specialty contractor members about the challenges facing them related to the amount of retainage that is being withheld on public projects. In some cases, businesses were changing how they borrowed and financed the projects based on the length of delivery of said retainage. Many ideas surfaced on how to create some flexibility, including the proposed idea of using retention bonds to replace the money being withheld. For many reasons, we could not find consensus on this idea.   

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In order to find a balance with many contractors and public owners' groups, we struck a deal that simply lowered the amount from 5% to 3%, which is written in the Iowa Code. Now, public owners can only withhold a lower amount thereby keeping more money in our members’ pockets. For instance, using simple math, if you are working on a $10,000,000 project, $500,000 was withheld in retainage previously. Now, that number has been reduced to $300,000.