This regulation applies to a construction contract for which a contractor has furnished 100 percent payment security and 100 percent performance security. The percent for retainage specified in a contract under §A of this regulation may not exceed 5 percent of the contract amount. In addition to retainage, a primary procurement unit and the Maryland Transportation Authority may withhold from payments otherwise due a contractor an amount that the unit reasonably believes is necessary to protect the State's interest. A contractor may not retain from a payment due a subcontractor a percent of the payment greater than the percent for retainage retained by the primary procurement unit or the Maryland Transportation Authority. A subcontractor may not retain from a payment due a lower-tier subcontractor a percent of the payment greater than the percent of payments retained from the subcontractor. A contractor and a subcontractor are not prohibited, by §§D and E of this regulation, from withholding an amount in addition to retainage if the contractor or subcontractor determines that a subcontractor's performance under the subcontract provides reasonable grounds for withholding the additional amount.