SB-1205 • 2026

Public contracts: retention: architecture or engineering services.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Valladares
Last action: 2026-04-24
Official status: Set for hearing May 4.
Effective date: Not listed

Plain English Breakdown

The exact scope of what constitutes a 'design-bid-build contract' is not fully detailed in the provided official source material.

Public Contracts: Limiting Retention Payments for Architecture and Engineering Services

This law limits the amount of money that can be withheld as retention payments in contracts between public entities and architecture or engineering firms to no more than 5% of the total contract value, requires these funds to be released within 60 days after completion of services, and applies only to new contracts starting January 1, 2027.

What This Bill Does

Limits retention payments in contracts between public entities and architecture or engineering firms to no more than 5% of the total contract value for all design-bid-build contracts and amendments entered into on or after January 1, 2027.
Requires that any retained payments be released within 60 days after completion of services under the contract.
Defines key terms such as 'public entity' for clarity.

Who It Names or Affects

Public entities entering into contracts with architects and engineers.
Architects and engineering firms working on public projects.

Terms To Know

Retention payments: Money held back from a contractor's payment until certain conditions are met, such as completion of work or resolution of disputes.
Public entity: An organization that is part of the government and serves public purposes, like cities, counties, or state agencies.

Limits and Unknowns

The bill applies only to new contracts starting on or after January 1, 2027 and does not affect existing contracts.
It specifies that retention payments are limited for design-bid-build contracts but does not mention other types of contracts.

Bill History

2026-04-24 California Legislative Information
Set for hearing May 4.
2026-04-22 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 7. Noes 0.) (April 22). Re-referred to Com. on APPR.
2026-04-14 California Legislative Information
From committee: Do pass and re-refer to Com. on L. GOV. with recommendation: To consent calendar. (Ayes 15. Noes 0.) (April 14). Re-referred to Com. on L. GOV.
2026-04-14 California Legislative Information
Set for hearing April 22 in L. GOV. pending receipt.
2026-04-09 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on G.O.
2026-04-09 California Legislative Information
Set for hearing April 14.
2026-04-08 California Legislative Information
Re-referred to Coms. on G.O. and L. GOV.
2026-03-24 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.
2026-03-04 California Legislative Information
Referred to Com. on RLS.
2026-02-20 California Legislative Information
From printer. May be acted upon on or after March 22.
2026-02-19 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 1205, as amended, Valladares.
Public contracts: retention: architecture or engineering services.
Existing law imposes various requirements regarding the formation, content, and enforcement of public works contracts. Existing law generally requires that retention proceeds withheld from payment by a public entity be released within 60 days after the date of completion of the work of improvement, except as specified in case of a dispute. Existing law limits the allowable amount of retention proceeds withheld in a contract between a public entity and the original contractor, a contract between the original contractor and a subcontractor, and a contract between subcontractors, as specified. Existing law defines “public entity” differently for these various purposes.
This bill would prohibit any
retention of payment
retention payments from exceeding 5% of the payment
for
all contracts,
contracts under design-bid-build,
and amendments thereto, entered into on or after January 1, 2027, directly between a public entity and an individual or legal entity permitted by law to practice the profession of architecture or engineering.
The bill would require any retention withheld to be released no later than 60 days after completion of services under contract.
The bill would define terms for its purposes, including “public entity.”

Current Bill Text

Read the full stored bill text

Download Bill PDF