Public agencies could not withhold progress payments over minor errors

Public agencies would be barred from holding progress payments otherwise owed solely over minor paperwork errors. Covered bodies include school boards, State colleges, and road agencies. State agency contracts must contain a clause allowing payments to be held. Work must meet the contract, and final payments are excluded. Errors must be accidental and cannot affect cost, scope, safety, insurance, required financial guarantees, or work eligibility. Errors cannot involve fraud, false statements, or important contract requirements, or substantially affect the amount owed, contract performance, or the agency’s legal ability to pay. The rule would take effect immediately if enacted. Agencies would give written notice and a reasonable correction period of no more than 10 business days. Missing that deadline could allow later payments to be held.