Retentions Retentions are amounts of money which are withheld or retained by the Employer from each certified interim

progress payments. This is usually a percentage of each certified interim progress payment due to the Contractor up to a limit, as specified in the Contract Data. These provide Employer a readily available fund that can be used to effect remedies in the event that the Contractor fails to produce finished work of an acceptable standard. Retention requirements will affect the bid prices. This results from the Contractor having to bear the cost of financing associated with the delay in full payment for works completed. The maximum amount of Retention must be kept at a realistic level after taking into consideration the other forms of security held, such as the Performance Security. Normally the maximum Retention total (Limit of Retention) will be five percent of the Contract Price. Retentions will be deducted as a percentage of each progress payment until such time as the stipulated maximum amount of Retention is reached. Under normal circumstances the deduction will be ten percent of each payment. Fifty percent of the Retention is released on issue of the Taking-Over Certificate (Completion Certificate). The remaining 50% is released at the end of the Defects Liability Period, provided that the Contractor has met all his obligations, and upon issue of the Final Certificate.