I'm managing a Design Build Public contract that allows for 5% retention. the work is set up in 2 phases, phase 1 is design with some early works/preconstruction and phase 2 is construction. I'd like to know if retainage can be withheld on the phase 1 (professional services/designer/architect) work or does retention kick in when construction starts?
It would depend upon what it says about retention in your contract, or contracts
thanks for your reply, Brion. that's what's confusing me, "Five percent of each progress payment will be retained until the Contract Work or GMP Work Package has been completed and accepted" the way the contract reads, it sounds like every pay app will have retainage, but I'm being told it's only on the contruction work.
I'd have to see the contract.
alright, thanks for your help.
I do a lot of work for my GCs on their design build projects and am a certified DBIA professional. The public agency may, and typically does, hold the 5 percent retention for design phase work. You could in theory have a contract that only holds retention on the construction or that holds a different amount of retention during design (e.g., 3.5 percent). But that is contract specific and would be atypical in my experience. They hold retention because it's not uncommon to have a design flaw that comes out during construction. And because you're the design builder and single point of responsibility (one throat to choke), public agencies feel comfortable holding the retention in case of a design error.
Consider asking for a reduction in retention or sometime during phase 2 when the design is complete and signed off of. You'll need a consent of surety letter typically for that, but that won't be hard to get.
Good luck and feel free to reach out directly if you have any other questions.
Sean,
thanks so much for your thorough answer, and for confirming my thoughts. I'm on the owner's rep side and our contract states 5% retention on all contract work or GMP work package and my PM insists "Retention is only required under California
Public Contracting Law on construction. The law does not require, nor does it
authorize retention for professional services" I'm almost certain this statement is incorrect, I just wanted to make sure. thanks again. have a great day!
Hi, the fact that you are an owner's rep does change things. That's a different ball game than being a designer working as a subcontractor to the design-build entity (where retention is typical). If you want discuss further, I can probably give you some left and rights in a quick phone call. I just need to get some more info.