The STA’s comments follow the recent consultation paper published by Scottish Futures Trust (Project Assurance in Public Sector Construction Contracts: A Potential New Approach Which Eliminates Cash Retentions) regarding a review into construction procurement in Scotland.
“It is the Structural Timber Association’s view that the recommendations outlined in the document are critically needed and overdue,” said STA chief executive Andrew Carpenter.
“This is an issue of particular importance to our members, reflected in our new terms and conditions for 2016. “Our members often contract on the basis of a 30-day payment terms, meaning their clients hold substantial surety at the time of project completion by way of interim payments due.
“Consequently, the Structural Timber Association is of the viewpoint that further assurance by way of cash retention is unnecessary.”
Furthermore, the Construction Act provides the facility to issue a Pay Less Notice for defective work at or after the time of practical completion.
This gives additional assurance to end clients as this can continue to be withheld until any defects are remedied.
Moreover, timber structures are mostly covered over by other trades with defects being remedied prior to handover. In the rare occasions when latent defects occur, they are usually corrected at minimal cost.
Additionally, the provision of collateral warranties also provides further assurance to the end user to cover any possible defects in design or construction. This effectively negates the need for retention completely.
Lastly, Structural Timber Association members are often engaged in supply-only projects. As they are not the subcontractor but the supplier in these instances, it is only logical that cash retention should not apply in these cases”.
