Page 220 - BASIC GUIDELINE FOR QS

Quantity Surveying: Guideline for Quantity Surveyor Chapter 6

6.17 Retention Money
All standard construction contract forms provide for 1% of the total valuation to be
deducted from amount to be withheld by the employer until work is completed by the

contractor.
Retention money is described as the sum of money held by the employer as a
safeguard for any defective or non-conforming work by the contractor. This provision

safeguards the employer by defects which can occur during the defects liability period if
the contractor doesn’t response according to the contract terms.

6.17.1 Purpose of Retention Money

In general, Retention Money provides protection to the employer. Retention money gives
the idea of importance of completing the signed project as per it’s terms and designs.

Contractor has to complete the scope of work under his contract in order to receive the
retention money amount withheld.
This is how employer is protected against the money he pays in monthly

progress claims.
With such retention held, the contractor takes the responsibility to complete the
construction project as per the design and quality stated in the initial contract.

Figure 6.9 : Sample of Progress Claim on Deducting Retention Money

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