Retention Fees

Mitchells Scaffolding

Mitchells Scaffolding

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Have any of you been subject to a retention fee

as we are getting the terms through i have to scan all the small print for retention fees

as scaffolding is NOT part of the final product mearly a means for a project to go forward progressively or otherwise i would have thought any retention should only be held until all the scaff has been struck
but as i wade through the reams and reams of terms the retention period has in some cases been a year at 5% of the overall charge its a lot of dosh if it goes un noticed
 
Yeh all try it on just tell em to poke it

Never get the money bk half the time
 
Yeah as allscaff said.

We never agree to retention and ask for it to be set at 0% in the contract.

It's rarely an issue.
 
Scaffold has no bearing upon the finished product & therefor under our terms not liable to retention....speaking to an unsympathetic QS once i informed him if he wished us have a retention of 5% held back then we would have to implement a 10% material fee untill the several thousands of pounds of our stock was returned...hey presto he saw the light
 
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They Are Chancing Their Mitt Here Mitchells,Tell Them No Way Jose.
 
This is not new and has been debated for decades.
There are two parts to this clause in most contract forms - "% retention" and "Maintainance period"
You can generally pick them out in the pre-contract documentation. Many contracts allow a 50% release on final agreement and the remainder to be released on practical completion of the main contract works. This could be several years after the scaffold contractor has left site.
Best to discuss this at the time of contract placement to agree if a retention is going to be held and in the worst case scenario that all retentions to be released on agreement of the scaffolding account final. Make sure this is entered into the contract document and the appropiate clause is ammended and initaled by both parties.
There are alternatives such as retention bonds but unless the scafffold contract is worth a £million plus the premium may well be inhibitive.
 
I must admit to having some retention issues in the past but after speaking to quite a few mostly on the forum we never accept it. Once they know you are serious about it they will back down, never an issue now.
 
aom said:
I must admit to having some retention issues in the past but after speaking to quite a few mostly on the forum we never accept it. Once they know you are serious about it they will back down, never an issue now.
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I do agree that its best to talk it out before commencing work.

Having worked most of the time in the highly competitive London market It has happened to me several times that a contractor has abandond the negotiations and placed his order with a competitor purely on the retention issue.

With all things it comes down to how much he wants your service and how much he is willing to pay.
 
Agreed, but if he is worth his salt, he will have already negotiated a no retention policy for all hired plant and other trades that have nothing to do with the building for himself. It's just another tax on the small firms who are daft enough to swallow it and another revenue stream to allow the so called big boys to finance their project with other peoples cash.

Your right Binthere, I am coming from a very small angle and operating ground, so I may not have the same competitive pressures they have in central London. I do feel the more that wear it, the harder it becomes for me to reject it.
 
I am really saddened that in 2013 we (and other trades) are still targeted by this clause. Back in the mid 80's the sub-contracting scaffolding companies had worked together and virtually wiped out retention's being held against our works. With the crash in the late 1980's which began the demise of the largest scaffold group's the main contractors returned to agressively implimenting retentions and LAD's.
Looking at the ledgers of some (larger) companies I have recently been with the most common O/D accounts are those of retention, and it totals tens of thousands.
 
Doesn't really surprise me to hear that being honest. Most I have dealt with will back down as long as I sign up to the rest of their agreement, which I almost do. That self billing malarky gets right up my nose as well, we do the work, write an invoice and expect payment 30 days later, it's not difficult and I don't feel we ask too much.
 
Self billing has never caused me a problem. Having started surveying before the introduction of VAT (the root of Payment Application and self-billing) it became part of the valuation/cash collection process. The issues to me always were that of agreeing the basis of claiming additions as many contracts would run into hundreds of additions. (over 1200 variations on canary wharf for instance).
 
I don't doubt for a second that was the idea of it, but for people like me it's just another delaying tactic to slow the whole process down and make it difficult to add a charge for late payment. I don't sign up for that either, they get a bill and that is it, they can call it what they want as long as I get paid on time. Again, it must be a nightmare on large sites for all the extra's, but most of these companies are now just management companies especially when they are up here, so manage the thing.
 
Thanks chaps yet again a good set of answers to absorb we have knocked out the retention and as regards alteration cost our guys are fully aware that no work has to be done without our say so and an order will be in hand before taking it on
 
Mitchells Scaffolding said:
Thanks chaps yet again a good set of answers to absorb we have knocked out the retention and as regards alteration cost our guys are fully aware that no work has to be done without our say so and an order will be in hand before taking it on
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If a scaffold company is giving a good reliable service then retentions should melt away, I am sure that Mitchells as well as AOM do fall into this catagory.

With additions, getting the order before work commences is best practice, but your goal should be to have the price for the addition included on the order. This way the main contractors QS will have 'cost certanty' and you will know payment will be made correctly.
 
Binthere said:
If a scaffold company is giving a good reliable service then retentions should melt away, I am sure that Mitchells as well as AOM do fall into this catagory.

With additions, getting the order before work commences is best practice, but your goal should be to have the price for the addition included on the order. This way the main contractors QS will have 'cost certanty' and you will know payment will be made correctly.
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the known alterations are all included but its the stuff that just crops up when on site that simply cannot be factored in before the site is up and running things " like oh!can you just do this !!! or oh the dumper has hit the scaff and bent some stuff can you put it right that have happened on occasion
as this job is progressive there will be a few
 
Mitchells Scaffolding said:
the known alterations are all included but its the stuff that just crops up when on site that simply cannot be factored in before the site is up and running things " like oh!can you just do this !!! or oh the dumper has hit the scaff and bent some stuff can you put it right that have happened on occasion
as this job is progressive there will be a few
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All larger site works do have the unforseen 'extras' that crop up - small damage repairs should be covered by Daywork sheets as you are not increasing the area of work.
Do you have a schedule of rates for additional works? Some of the more profitable works I'v seen have been where the estimator has attached an SOR to the main quotation for use when additional works are required.
Ring fencing the additions and claiming additional hires are the two cornerstones of profit in contract scaffolding.
 
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