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SEC looks to the Olympics as retentions decline

Published: 21 November 2006 - 00:00
WHILE over 12% of construction contracts, by turnover, are now retention free, the Specialist Engineering Contractors (SEC) Group has voiced concerns that there are still too many contractors insisting on retentions, even though clients are not requiring them.
'Last year, the National Audit Office expressed its disapproval of the practice of retentions by stating that they had an adverse impact on the industry's capacity,' commented SEC Group chief executive professor Rudi Klein.

'My estimate is that over 12% of construction, by turnover, is now a retention-free zone.

'However, I remain concerned that there are still too many lead contractors demanding retentions, even where their clients are not requiring them.'

Professor Klein added that SEC Group awaited a clear message from the Olympic Delivery Authority that retentions will not be used on any Olympic project.

'If trust and collaboration are to underpin Olympic delivery, retentions - which are the antithesis of trust - are wholly inappropriate,' Professor Klein insisted.

The SEC has now updated its list of clients that no longer include retention clauses in their construction contracts.

Latest additions to the full list, which can be found at www.secgroup.org.uk , includes ALDI (food stores), ARENA (housing association), Circle 33 (housing association), DeVere Hotels (on framework agreements for capital projects), the Environment Agency, the Highways Agency, IKEA, Luminar Leisure, and Yorkshire Water.

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