Existing law authorizes the Director of the Department of Transportation, subject to certain exceptions, to make monthly payments to a contractor who satisfactorily performs any highway improvement or construction in full as the work is completed by the contractor. The payments must not exceed 97.5 percent of the contract price. The Director is required to retain the remaining 2.5 percent of the contract price until certain conditions are met. The Department is required to perform a final inspection of the work completed under a contract for a project of highway improvement or construction. If an inspection discloses that the work was completed satisfactorily, the Department is required to reduce the amount of the contract price retained to not more than $50,000 until the entire contract is completed satisfactorily and accepted by the Director. (NRS 408.383) Section 1 of this bill changes the percentage of the contract price which must be retained by the Director to 5 percent, but not more than $50,000. Section 1 eliminates: (1) the requirement for the Department to perform a final inspection; and (2) the requirement that if a final inspection discloses that the work was completed satisfactorily, the Director reduce the amount of the contract price retained by the Department to not more than $50,000, with any remaining amount to be retained until the contract is completed satisfactorily and accepted by the Director. Section 1 requires instead that the amount of the contract price that is retained be retained until the entire contract is completed satisfactorily and accepted by the Director. Existing law requires a contractor to disburse money paid to the contractor under a contract for a project of highway improvement or construction to his or her subcontractors and suppliers within a certain amount of time and provides that, if a contractor withholds more than 2.5 percent from such a required payment, the subcontractor or supplier may contact the Director to resolve such a dispute between the contractor and the subcontractor or supplier. (NRS 408.383) Section 1 provides that a subcontractor or supplier may contact the Director to resolve such a dispute if the contractor withholds more than 5 percent of a required payment. Section 2 of this bill prohibits the retroactive application of the amendatory provisions of this bill to contracts made or awarded by the Department before the effective date of this bill.

Statutes affected:
As Introduced: 408.383
Reprint 1: 408.383
As Enrolled: 408.383
BDR: 408.383