I read your article “Blood and money” (2 September) with great interest.
BSRIA has collected data on retentions for several years and can support the case that M&E contractors, and particularly smaller firms, experience at worst dire cash flow problems and at best frustration and high resource costs thanks to repeatedly having to chase outstanding money.
In BSRIA’s collection of key performance indicators for M&E in 2005, clients had assigned retentions in 80% of projects assessed. In 80% of projects, at the time of our research, 60% had not released retention money. In only 2% of cases was this attributed to defects that had not been rectified to the client’s satisfaction. In an earlier publication from BSRIA, Retentions: Why They Should Go (2002), we showed that for firms with one to 10 staff, 14% of retention monies had been outstanding for more than two years.
In our 2005 assessment of key performance indicators, satisfaction with the release of retention money was the worst, scoring 3.6 out of 10. Considering that our industry is being encouraged to work collaboratively and forge better working relationships, surely the practice of assigning retentions is becoming outmoded – and certainly the practice of withholding money when it is due is completely untenable.
Geraldine Samuelsson-Brown, BSRIA