Oregon Construction Contractors (CCB) Practice Test

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What percentage is typically limited by Oregon law for retainage from progress payments?

10 percent
5 percent
15 percent
20 percent

The correct answer is: 5 percent

In Oregon, the law limits the retainage from progress payments to a maximum of 5 percent. This provision is designed to protect contractors and subcontractors, ensuring that they receive the majority of their payments promptly as work progresses. The retainage serves as a security measure for the project owner, allowing them to hold back a small percentage to ensure that all work is satisfactorily completed and to cover any potential issues that may arise. By capping the retainage at 5 percent, the law strikes a balance between providing security for project owners and ensuring fair compensation for contractors and subcontractors. This helps to maintain cash flow in construction projects, which is crucial for the sustainability of smaller firms often reliant on timely payments.