The Case for Retainage Reform: A “Win-Win” Proposal
AWCI's Construction Dimensions January 1, 2009
The One with the Gold Makes the Rules.
And so it is with retainage—a word foreign to most dictionaries, but well-known to wall and ceiling subcontractors for its corrosive effect on the bottom line. For too long, the construction industry has tolerated withholding retainage far in excess of normal profit margins until well after work is satisfactorily performed.
Only the construction industry inflicts such a holdback on the party providing the goods or services. Who could imagine a car dealer standing by while you attempted to drive your new truck off the lot after paying only 90% of the purchase price? Yet that is precisely what many contractors and subcontractors have learned to tolerate.
Read more in the linked PDF.