NSCC No Retention Policy
NSCC believes that the withholding of retention is an outdated practice which is unnecessary in the modern construction industry.
The best guarantee of quality lies in the choice of a competent and qualified supply chain and NSCC Specialist Contractors are committed to seeking to attain the highest applicable standards in health and safety, training and technical performance.
NSCC recommends that, whilst its Specialist Contractors are free to negotiate their own respective
contractual terms, they do not accept cash retentions.
Adopted by NSCC members – 1 January 2011
- M - Make it your policy
At the outset of a project, inform the contractor or client that you are working for that you do not accept cash retention in accordance with the NSCC No Retention Policy
You can write to the contractor or client using the following letter:
When signing the contract, make sure the cash retention clause does not apply by either striking it out or writing '0%' in the appropriate box in the articles.
- O - Obtain details of the client's policy
If the contractor insists on withholding cash retention, ask for a copy of the main contract retention provision to determine whether the project client is withholding retention
Clients are increasingly recognising that cash retentions are an outdated practice and they no longer withhold retention from their supply chains. The Governments in England, Wales and Scotland have publicly stated that, where retention is not withheld from the main contractor, it should not be withheld from sub-contractors in the supply chain.
You can find out the position on retention under the main contract by writing to the contractor or project client:
- Requesting details of main contract retention provision from contractor
- Requesting details of main contract retention provision from project client
If the project client is not withholding retention but the contractor insists on doing so from you, contact NSCC in confidence on 0844 249 5351 or via email@example.com.
- N - Negotiate an alternative
Highlight to the contractor that cash retention is no longer the best guarantee of quality and there are better forms of security that you can offer such as a retention bond
A retention bond is an agreement between you, the contractor and a third party known as a surety provider, which acts as a guarantor between the two parties. The bond agreement states that in return for the contractor not withholding cash retention, the surety provider will undertake to pay the contractor up to the amount that they would have had by way of cash retention should you fail to carry out the works or remedy defects. NSCC works in partnership with UK Surety to provide access to retention bonds.
- E - Evaluate other options
If the contractor will not negotiate, consider whether you are prepared to offer a discount in return for no cash retention
Although there is increasing recognition that retentions no longer work, contractors can be reluctant to accept alternatives due to the impact that this will have on their cash flow. However, offering a discount in the sub-contract sum equal to the value of the retention may persuade a contractor not to withhold retention. Alternatively, you can try negotiating a reduced rate of retention which is only deducted from the last few payments rather than throughout the works in return for the discount.
NSCC members that are negotiating retention have access to a free legal and contractual helpline – contact NSCC for further information.
- Y - Your decision
If the answer is ultimately 'no', decide whether you are prepared to work for a contractor or client that withholds cash retention from you.
More and more Specialist Contractors are choosing not to work for contractors and clients that withhold retention and the collective weight of Specialist Contractors saying ‘no’ as part of the NSCC No Retention Policy is changing custom and practice.
If it is a central Government contract and you have confirmed that the project client is not withholding retention from the contractor, you can report it to NSCC by clicking on the Fair Payment Feedback Form.
YOUR No Retention Tools