Build UK has collated the standard retention policies of major public sector clients to increase transparency around the use of retentions. Please click on the client name for additional information.
|Name||Cash retention % held||Cash retention released|
|Constructing West Midlands||0%||N/A|
|Notes The CWM Framework Agreement applies a default of no cash retention which is required to be cascaded through the full supply chain. Cash retention may be used in extenuating circumstances but only where all other options have been ruled out and this would require confirmation in writing to CWM.|
|Defence Infrastructure Organisation (MoD)||Varies||Varies|
|Notes Retention is determined at either Project or Delivery team level. The amount and terms on which it is withheld will be guided by the value of the contract.|
|Department for Education||3%||Half released on completion of the project.
Balance released on the issue of the Certificate of Completion of Making Good Defects.
|Department for Health and Social Care||Varies||Varies|
|Notes The use of retention is determined by each client organisation such as the NHS. For capital construction projects delivered under the ProCure23 framework, the default position is no cash retention, although a client organisation can choose to withhold retention on a project-by-project basis. Capital construction projects delivered under the ProCure 22 framework do not have cash retention withheld.|
|The Environment Agency||0% - 5%||Half paid on completion.
Balance paid at the end of defect period if defects have been made good.
|Notes The Environment Agency does not use retention except where a contract: 1) Has a construction value greater than £50 million which goes out to the Official Journal of the European Union (OJEU) or 2) Is likely to run beyond the framework period (currently the Next Generation Supplier Arrangements - NGSA). In these circumstances, retention is generally withheld at 5%.|
|High Speed 2||0%||N/A|
|Notes HS2 states in its Fair Payment Charter that it is ‘committed to having no cash retentions and will cascade this requirement through the supply chain via [its] Tier 1 contracts’.|
|Notes Retention bonds are used in exceptional circumstances as dictated by commercial requirements. This will often be the case with private finance/Design Build Finance Operate (DBFO) contracts, where a Special Purpose Vehicle has been set up, or with infrastructure assets that have a long maintenance period (tunnels or ICT assets).|
|Ministry of Justice||0% - 3%||Half paid on practical completion.
Balance paid at the end of the defect period if defects have been made good.
|Notes Projects of low to medium risk attract a retention rate of 0%. Where a project is over £25 million and deemed to be strategically important (such as a new prison or a major extension to an existing prison), whether to include retention within the contract is determined on a case by case basis. If retention is withheld, it may be as either cash retention or a retention bond and will be between 1.5% and 3%.|
|Notes Formalising the approach of the Network Rail Fair Payment Charter, cash retentions are no longer used between Network Rail and its Tier 1 Capital Works suppliers. Network Rail's standard terms & conditions for CP6 (from 1 April 2019 until 31 March 2024) also prohibit the use of retentions between Tier 1 Capital Works suppliers and their Tier 2 sub-suppliers. This approach is expected to be maintained for CP7 (from 1 April 2024 until 31 March 2029).|
|Notes The Scape Framework Agreement applies a default position of no cash retention. Whilst it is actively discouraged, a client organisation can still choose to hold cash retention on a project-by-project basis.|
|Notes Sellafield's alliance with its four delivery partners, known as the Programme and Project Partnership, does not include retention.|
|Southern Construction Framework||N/A||N/A|
|Notes The SCF recommends that the use of cash retention is avoided wherever possible. Where cash retention is used, the SCF Fair Payment Charter states that "any client arrangements for retention will be replicated on the same (or more favourable) contract terms throughout the supply chain".|
|Tideway||3%||Half released on completion of the works or when Tideway takes over the works, whichever occurs first.
Balance released on the issue of the Certificate of Making Good Defects, which falls three years after completion of the works.
|Notes A retention free amount, equating to approximately 22-24% of the original target price, is included in the contract. Once the retention free amount is exceeded, 3% retention is applied. A retention bond may be provided in lieu of cash retention.|
|Transport for Wales||Varies||Balance paid at the end of defect period if defects have been made good.|
|Notes Whilst Transport for Wales has the option to withhold retention in its standard suite of contracts, it does not tend to do so. If retention is withheld, the amount and terms would be determined on a contract by contract basis.|
About this Information
Build UK has published this information as part of its Roadmap to Zero Retentions to increase transparency around the use of retentions within construction.
The above table sets out the standard retention policies of Government departments, ministries, agencies and public bodies that have been identified as procuring construction services.
It includes the cash retention percentage generally included in contracts entered into between the relevant Government department or wider public sector body and its Tier 1 contractors as well as when the money should be released. This is to help the supply chain understand what it should expect to see in contracts on projects procured by different public sector clients.
Additional clarifying information can be found by clicking on the relevant client name. Please note that the wording reflects that used by the relevant Government department or wider public sector body.
If you have any queries regarding this information, please contact retentions@BuildUK.org
To the fullest extent permitted by applicable law, Build UK hereby expressly disclaims (on behalf of itself and of its directors, officers, employees, agents and contractors) any and all liability under any system of law for any loss or damage of any description incurred by any person (natural or corporate) at any time as a direct or indirect result of (a) any information (whether erroneous, inaccurate or otherwise) contained in or omitted from the table and/or this webpage, and/or (b) any action taken or omitted to be taken in reliance in whole or in part on any said information.