Public Contract Code section 10194

(a)

If the department elects to award a project pursuant to this article, retention proceeds withheld by the department from the design-build entity shall not exceed 5 percent if a performance and payment bond, issued by an admitted surety insurer, is required in the solicitation of bids.

(b)

In a contract between the design-build entity and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention proceeds withheld may not exceed the percentage specified in the contract between the department and the design-build entity. If the design-build entity provides written notice to any subcontractor that is not a member of the design-build entity, prior to or at the time the bid is requested, that a bond may be required and the subcontractor subsequently is unable or refuses to furnish a bond to the design-build entity, then the design-build entity may withhold retention proceeds in excess of the percentage specified in the contract between the department and the design-build entity from any payment made by the design-build entity to the subcontractor.

Source: Section 10194, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=PCC§ionNum=10194.­ (updated Jan. 1, 2015; accessed Jul. 20, 2026).

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Verified:
Jul. 20, 2026

§ 10194's source at ca​.gov