R2-7-509. Conditions for Use of Substitute Security in Lieu of Retention

A contractor may submit substitute security to replace contract payment retention if: 1. The contractor requests the use of substitute security before the first progress payment; 2. The contractor submits an invoice with each progress payment in an amount of no less than 10% of the progress payment, or the contractor submits an invoice once at the beginning of the project in an amount no less than 5% of the total contract amount; 3. The interest earned on the security shall accrue to the benefit of the contractor but shall be retained by the contractor until the agency chief procurement officer has approved completion and acceptance of all work to be performed under the contract; and 4. The contractor ensures that the date of maturity of the security is after the estimated contract completion date, but no later than one year after the estimated contract completion date.