Contractors guilty of sitting on payments to subbies

Main contractors are increasingly withholding retention monies on completed projects from their M&E subbies despite industry attempts to replace the practice with partnering.

According to the latest annual figures from BSRIA, subbies report that the practice of retentions is now on the increase.

Principal research consultant Gerry Samuelson-Brown said the latest annual figures on release of retentions indicate a 'dire' situation. "They are the worst of all the key performance indicator information I collect," she said.

The research asked contractors and subbies to evaluate completed projects on a scale of one to 10 against a range of criteria (one being the worst). "When M&E contractors were asked how satisfied they were with the release of retention monies, 37% scored one and only 7% scored eight or 10."

Typically, 60% to 70% score eight to 10 on most project criteria. The results are based on a robust sample of up to 200 M&E contractors. Traditionally the release of retentions has always been the worst of any results, says Samuelson-Brown, but this year is worse than last.

The industry's failure to outlaw retentions was confirmed by eight out of 10 clients (82%).

[Contract Journal, 19 July 2006, p. 3]