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Retention money

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Retention money

Post by abdlkhald on Wed Nov 11, 2009 9:47 am

Can i claim the retention money amounting to about 85% of the total project, considering that the said percent was accepted and is substantially completed and occupied by the owner?
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Re: Retention money

Post by Guest on Wed Nov 11, 2009 11:15 am

NO.

The performance security may be released by the procuring entity after the issuance of the Certificate of Acceptance, subject to the following conditions:
a) Procuring entity has no claims filed against the contract awardee or the surety company;
b) It has no claims for labor and materials filed against the contractor; and
c) Other terms of the contract. (Section 39.5)

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Re: Retention money

Post by abdlkhald on Wed Nov 11, 2009 1:12 pm

If the procuring entity issues a certificate of acceptance for every accomplishments we made in every billing period, can that certificate be used as my basis for the release of my retention?
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Re: Retention money

Post by sunriser431 on Wed Nov 11, 2009 1:53 pm

WormaixJr wrote:NO.

The performance security may be released by the procuring entity after the issuance of the Certificate of Acceptance, subject to the following conditions:
a) Procuring entity has no claims filed against the contract awardee or the surety company;
b) It has no claims for labor and materials filed against the contractor; and
c) Other terms of the contract. (Section 39.5)
What being ask is the release of the Retention money not the Performance security (Section 39 of the revised IRR)
anway here the guidelines for the release of performance security, click this link for reference http://www.gppb.gov.ph/issuances/Resolutions/2005/12-2005.pdf
Additional information which is self explanatory
Section 62. Warranty
62.1. For the procurement of goods, in order to assure that manufacturing defects shall be corrected by the supplier, a warranty security shall be required from the contract awardee for a minimum period of three (3) months, in the case of Expendable Supplies, or a minimum period of one (1) year, in the case of Non-expendable Supplies, after acceptance by the procuring entity of the delivered supplies.

The obligation for the warranty shall be covered by either retention money in an amount equivalent to at least ten percent (10%) of every progress payment, or a special bank guarantee equivalent to at least ten percent (10%) of the total contract price. The said amounts shall only be released after the lapse of the warranty period or, in the case of Expendable Supplies, after consumption thereof: Provided, however, That the supplies delivered are free from patent and latent defects and all the conditions imposed under the contract have been fully met.. Hope this might help. bounce
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Re: Retention money

Post by Guest on Wed Nov 11, 2009 3:00 pm

Warranty is given after the completion of the structure (infra) for purposes of security of the PE from structural defects. And for infra the years provided in the law, the expiration of which will be the determination of the release of the contractor form the warranty.

And what you have posted is for goods not for infra which is the question.

That is the reason I answered the release of the Performance Security because the project is still pending.

The project must first be finished before the retention money can be released otherwise the PE will have no protection against the contractor during the pendency of the project.

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Re: Retention money

Post by riddler on Thu Nov 12, 2009 10:24 am

abdlkhald wrote:If the procuring entity issues a certificate of acceptance for every accomplishments we made in every billing period, can that certificate be used as my basis for the release of my retention?

Procuring Entity do not issue a Certificate of Acceptance unless otherwise the project is finished. The condition for its release must be (1) one year after the lapse of 10% retention which are either in Cash or Bonds. However, the 10% retention maybe released subject to the following condition of the Annex "E" of the amended IRR.


6. RETENTION MONEY

6.1. Progress payments are subject to retention of ten percent (10%) referred to as the
"retention money." Such retention shall be based on the total amount due to the
contractor prior to any deduction and shall be retained from every progress payment
until fifty percent (50%) of the value of works, as determined by the procuring
entity, are completed. If, after fifty percent (50%) completion, the work is
satisfactorily done and on schedule, no additional retention shall be made; otherwise,
the ten percent (10%) retention shall be imposed.


6.2. The total "retention money" shall be due for release upon final acceptance of the
works. The contractor may, however, request the substitution of the retention
money for each progress billing with irrevocable standby letters of credit of from a
commercial bank, bank guarantees or surety bonds callable on demand, of amounts
equivalent to the retention money substituted for and acceptable to Government,
provided that the project is on schedule and is satisfactorily undertaken. Otherwise,
the ten percent (10%) retention shall be made. Said irrevocable standby letters of
credit, bank guarantees and/or surety bonds, to be posted in favor of the
Government shall be valid for a duration to be determined by the concerned
implementing office/agency or procuring entity and will answer for the purpose for
which the ten percent (10%) retention is intended, i.e., to cover uncorrected
discovered defects and third party liabilities.

if you already fulfilled the 50% of the project within schedule as determined by the PE, you may demand not to retain the 10% retention for every progress billing beyond 50% of your work accomplished.

p.s.

You might be referring to a Certificate of Completion which is different from a Certificate of Acceptance. Very Happy Smile
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Re: Retention money

Post by Guest on Thu Nov 12, 2009 11:07 am

ruel wrote:
abdlkhald wrote:If the procuring entity issues a certificate of acceptance for every accomplishments we made in every billing period, can that certificate be used as my basis for the release of my retention?

Procuring Entity do not issue a Certificate of Acceptance unless otherwise the project is finished. The condition for its release must be (1) one year after the lapse of 10% retention which are either in Cash or Bonds. However, the 10% retention maybe released subject to the following condition of the Annex "E" of the amended IRR.


6. RETENTION MONEY

6.1. Progress payments are subject to retention of ten percent (10%) referred to as the
"retention money." Such retention shall be based on the total amount due to the
contractor prior to any deduction and shall be retained from every progress payment
until fifty percent (50%) of the value of works, as determined by the procuring
entity, are completed. If, after fifty percent (50%) completion, the work is
satisfactorily done and on schedule, no additional retention shall be made; otherwise,
the ten percent (10%) retention shall be imposed.


6.2. The total "retention money" shall be due for release upon final acceptance of the
works. The contractor may, however, request the substitution of the retention
money for each progress billing with irrevocable standby letters of credit of from a
commercial bank, bank guarantees or surety bonds callable on demand, of amounts
equivalent to the retention money substituted for and acceptable to Government,
provided that the project is on schedule and is satisfactorily undertaken. Otherwise,
the ten percent (10%) retention shall be made. Said irrevocable standby letters of
credit, bank guarantees and/or surety bonds, to be posted in favor of the
Government shall be valid for a duration to be determined by the concerned
implementing office/agency or procuring entity and will answer for the purpose for
which the ten percent (10%) retention is intended, i.e., to cover uncorrected
discovered defects and third party liabilities.

if you already fulfilled the 50% of the project within schedule as determined by the PE, you may demand not to retain the 10% retention for every progress billing beyond 50% of your work accomplished.

p.s.

You might be referring to a Certificate of Completion which is different from a Certificate of Acceptance. Very Happy Smile


Agree agree Very Happy

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