A Connecticut bill aimed at boosting needed cash flow for construction contractors doing business with the state has passed the Senate and awaits action in the House.
Senate Bill 131 would lower “retainage” amounts withheld from progress payments on commercial construction contracts from 7.5 percent to 5 percent, said state Sen. Thomas A. Colapietro, D-Bristol, co-chair of the general law committee.
The Senate passed the measure on Wednesday.
Colapietro said that while withholding a portion of contract payments can ensure contractors and subcontractors perform satisfactorily, it winds up hurting their profit margins and is “totally unnecessary” in tough economic times.
“Contractors must pay all of their expenses-including supplies, tools, and their personal and family bills,” he said in a statement. “Withholding retainage denies many contractors the cash flow necessary to keep their businesses and personal lives running. Even worse, if a contractor folds, their promised retainage money can disappear entirely. That’s not fair.”
Colapietro said he hopes the state will eventually withdraw the retainage cap entirely.