Public contracts: withheld payments.

The State Contract Act generally provides for a contracting process by state agencies for public works of improvement pursuant to a competitive bidding process, under which bids are awarded to the lowest responsible bidder, with specified alternative procurement procedures authorized in certain cases. Existing law requires an invitation for bid and any contract documents to include provisions permitting the substitution of securities for any moneys withheld by a public agency in order to ensure performance under a contract, and, at the request and expense of the contractor, requires securities equivalent to the amount withheld to be deposited with the State Treasurer or a state or federally chartered bank in the state as the escrow agent. Existing law alternatively permits the payment of retentions earned to the escrow agent, as specified. For purposes of these provisions, this bill would provide that a contractor includes a contractor performing a public works contract, as defined, and any person or entity who would qualify as a contractor, as specified.