California Code, Public Contract Code - PCC § 10346

Contracts may provide for progress payments to contractors for work performed or costs incurred in the performance of the contract.  Not less than 10 percent of the contract amount shall be withheld pending final completion of the contract.  However, if the contract consists of the performance of separate and distinct tasks, then any funds so withheld with regard to a particular task may be paid upon completion of that task.

No state agency shall make progress payments on a contract unless it first has established procedures, approved by the department, which will ensure that the work or services contracted are being delivered in accordance with the contract.