§ Mr. Hilary BennTo ask the Chancellor of the Exchequer what plans he has to phase out the retention system in respect of construction works procured by central Government; and if he will make a statement. [155265]
§ Mr. Andrew SmithA review of contracts is planned this year as part of the OGC' s ongoing performance-related Achieving Excellence in construction initiative.
GC/Works/1 (1998), the Government standard form of construction contract and its associated sub-contract, allows Departments to forgo retentions as part of their commercial agreements with suppliers. Retentions do not feature in Defence Estate's Prime Contract conditions.
The move to performance-based partnering type contracts will reduce the need for retentions in the future. The NAO report "Modernising Construction", published in January 2001, gave strong endorsement to the partnering approach, as a means of achieving best value.