The Government has snubbed a Select Committee report that blasted the use of retentions and has refused to endorse their phasing-out on public sector contracts.
Dealing a severe blow to the Specialist Engineering Contractors鈥� (SEC) Group and its members, the Government has refused to act upon a Trade & Industry Select Committee report that condemned the use of retentions as 鈥渙utdated鈥�, 鈥渋nefficient鈥� and 鈥渇requently harmful鈥� to small and medium-sized businesses.

In response to the report, that endorsed the phasing-out of retentions in public sector contracts by 2007, the government has decided that action is not necessary. It still believes that there is a link between retentions and defects, even though there is no evidence to support this.

As a consequence, the SEC Group wrote to Martin O鈥橬eill, chair of the Select Committee, lobbying him to readdress the issue. The Select Committee has now called in the DTI and Office of Government Commerce for further questioning. SEC Group executive secretary, John Nelson, said: 鈥淲e will continue to press the issue by providing further information that there is no link between defects and retention. It is a total red herring. Government, as a main client, should practice what it preaches and move away from retentions and adversarial practices and towards the Egan agenda of integrated teams and partnering.鈥�

As an interim measure, the SEC Group is urging government to change public sector contracts so that all retentions are ring-fenced for protection from insolvencies upstream and are returned on satisfactory completion of work.

Source

Electrical and Mechanical Contractor