Admin Order 44-23-01-F -- Final Public Contracting Rule 2022

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Exhibit A to Administrative Order No. 44-23-01-F City of Eugene Public Contracting Rules 2022 – Part 2 Page 133 Contractor, or otherwise applied against an obligation of the Contractor under the Public Improvement Contract. 4) Alternatives In Lieu of Cash Retainage. Unless a Contracting Agency that reserves an amount as retainage finds in writing that accepting bonds, securities, or other instruments described in part (a) of this section or a surety bond described in part (b) of this section poses an extraordinary risk that is not typically associated with the bonds, securities, other instruments or surety bond, as applicable, the Contracting Agency, in lieu of withholding moneys from payment, shall accept from the Contractor: a) Bonds, securities, or other instruments that are deposited and accepted as provided in subsection (6)(a) of this rule; or b) A surety bond deposited as provided in subsection (6)(b) of this rule. 5) Deposit in interest-bearing accounts. Upon election of the Contractor and when the Contract Price in the Public Improvement Contract is $500,000 or less, a Contracting Agency shall deposit cash retainage in an interest-bearing account in a bank, savings bank, trust company, or savings association, for the benefit of the Contracting Agency. Earnings on such an account shall accrue on the cash retainage from the date the Contractor's related payment request is fully approved by the Contracting Agency until the date the retained moneys are paid by the Contracting Agency to the Contractor. For purposes of this section, a payment of retainage is deemed to be "paid" by a Contracting Agency when the payment is transmitted to the Contractor, or otherwise applied against an obligation of the Contractor under the Public Improvement Contract. When the contractor makes an election for deposit of retainage into an interest-bearing account and the Contract Price in the Public Improvement Contract exceeds $500,000, the Contractor's election shall be satisfied by the Contracting Agency's establishment of an interest-bearing escrow account, pursuant to ORS 279C.570(2) [House Bill 2415 (2019 Oregon Laws, Chapter 486)]. 6) Alternatives In Lieu of Cash Retainage - Requirements. In lieu of cash retainage to be held by a Contracting Agency, the Contractor may substitute one of the following: a) Deposit of bonds, securities or other instruments: A) The Contractor may deposit bonds, securities, or other instruments with the Contracting Agency, or in any bank or trust company to be held for the benefit of the Contracting Agency. If the Contracting Agency accepts the deposit, the Contracting Agency shall reduce the cash retainage by an amount equal to the value of the bonds and securities, and reimburse the excess to the Contractor. B) Bonds, securities or other instruments deposited or acquired in lieu of cash retainage must be of a character approved by the Oregon Department of Administrative Services, which may include, without limitation: (i) Bills, certificates, notes, or bonds of the United States. (ii) Other obligations of the United States or agencies of the United States. (iii) Obligations of a corporation wholly owned by the Federal Government. (iv) Indebtedness of the Federal National Mortgage Association. (v) General obligation bonds of the State of Oregon or a political subdivision of the State of Oregon. (vi) Irrevocable letters of credit issued by an insured institution, as defined in ORS 706.008. C) Upon the Contracting Agency's determination that all requirements for the protection of the Contracting Agency's interests have been fulfilled, it shall release to the Contractor all bonds and securities deposited in lieu of retainage. b) Deposit of surety bond. A Contracting Agency, at its discretion, may allow the Contractor to deposit a surety bond in a form acceptable to the Contracting Agency in lieu of all or a portion of funds retained or to be retained. A Contractor depositing such a bond shall