(a) Standard provisions of most construction contracts provide that a stipulated percentage, generally 10 percent of each partial payment due to be made under the contract shall be retained by the local agency until the final completion and acceptance of all the work covered by the contract. The contract may, however, also provide that after a stipulated percentage, generally 50 percent of the work has been completed, the local agency may, with the prior written approval of the division, make partial payments in full for work which may still remain to be done, without retaining any portion thereof. The State's construction adviser is not authorized to approve reductions in retaining percentages.

(b) Amounts retained by a local agency in accordance with the terms of a contract must be held intact by it until the final payment (see § 1641-5.7) is made under the contract, unless the contract, with the prior written approval of the commissioner, has been amended to provide for the making of payments out of retained amounts.