The latest research from BSRIA shows exactly why m&e contractors should support the campaign by the Constructors Liaison Group to abolish retentions.
All sectors of the industry are badly affected, with BSRIA’s estimates putting the amount held in retention at £470 million.

The practice is hitting contractors where it hurts. Cash flow can be crippled – with profitability within m&e contracting averaging little more than 4%, the monies held in retention make up a large chunk of profits. Plus there is the terrible waste of resources needed to chase outstanding money – firms very rarely offer up retentions voluntarily, preferring to see monies as an easy way of enhancing their own cash flow.

So what can be done about it? Bonds are one obvious solution. The British Construction Steelwork Association has been using bonds since 1996. Better still would be the widespread adoption of retention-free partnering, surely a much better way of achieving zero defects than retentions, which fuel adversarial attitudes.

The CLG is urging contractors to lobby their local MPs to support the Early Day Motion 428 to abolish retentions. Add your voice to those that have already participated – your future may depend upon it.

Source

Electrical and Mechanical Contractor

Postscript

Andrew Brister, Editor