Support to ban retention has grown since the publication of a report by the CLG which showed that, while the Construction Act was working well, security of payment and the retention system needed further consideration.
The CLG's findings revealed that 96% of works/subcontracts do not have an adequate mechanism for payment, and 51% of contracts contained non-compliant adjudication provisions.
In 19% of contracts analysed, the referring party, usually the subcontractor, was required to pay the adjudicator's costs and/or the costs of the other party – win or lose.
The CLG also found that in 44% of contracts analysed, the final date was in excess of 17 days from the final payment date – 17 days being the benchmark set by the Scheme for Construction Contracts. Twenty percent of contracts extended the seven-day notice period required by the Act for the exercise of the right to suspension.
"The CLG will continue to monitor the legislation, the success of which is critical to the commercial interests of the specialist contracting sector," said the CLG chairman, John Harrower.
"We hope that the minister will consider measures to improve the implementation of the Construction Act as recommended in the report."
The CLG is also calling upon government to enforce tendering procedures that comply with CIB codes, and for the Treasury to monitor the Government's procurement arrangements.
"The Government should appoint a public sector procurement ombudsman to address contractors' and consultants' complaints", said the CLG.
"The Office of Government Commerce should also draft contracts embracing the principles of equality, team working and cost-efficient risk allocation...and abolish the use of cash retention on all public sector works."
As part of the CLG campaign against retentions, guidance has been issued to over 15 000 companies within the specialist sector on countering retention abuse.
Source
Building Sustainable Design
