Specialist firms take stand against retentions

Aaron Morby 13 years ago
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Thousands of specialist subcontractors have signed up to take a stand against main contractors holding retentions on jobs.

The  National Specialist Contractors Council today launched the No Retention Policy with support from around 100 key clients, contractors and suppliers.

The move has the backing of all the umbrella trade body’s 32 member organisations, which have come together to launch the nationwide campaign to resist retentions.

Suzannah Nichol, chief executive of the council, said she was delighted to see high profile clients such as Crossrail and Stanhope are increasingly recognising that there were better guarantees of quality than cash retention.

The practice of main contractors withholding up to 3% of contract value against future defects is reviled by subcontractors because it eats away at cash flows and proves costly to collect from their clients.

Stanhope removed retentions from its contracts some 20 years ago when it recognised that there was considerable disadvantage to its suppliers.

Peter Rogers, Director of Stanhope, said: “The passage of time has strengthened the case for our policy, having both improved the relationships with suppliers and removed the risk of abuse.”

Project bosses at Crossrail have also confirmed that they will not include cash retention in contracts and it does has said it does not expect cash retention to be withheld from the supply chain.

Project Bank Accounts will be used on Crossrail projects to increase transparency and make sure that cash retention is not imposed on the supply chain.

Crossrail has opted for a 2.5% retention bond that will remain in place until the defects certificate is issued.

The NSCC said it hoped other major clients to follow suit.

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