Construction Law/Calculation of Retention
I am performing a contract under FIDIC 1999 Yellow book and wish to know whether the calculation of the Retention is based on the Contract amount exclusive of Contingencies (10% of the Contract value)or the Measured contract value at each request for payment.
This is key as the contingencies are not entitled to the contractor unless circumstances permit. In this case none of the contingencies were used in the contract's end but the interim payments can and will be affected by what figure the retention is based.
Dear Roshan S Baboolal,
Retention shall be applied with the specified percentage to each monthly payment certificate. Any amount that is included to the payment certificate is subject to retention. If only there is a special clause in the contract or any amendment for some items shall not be subject to retention than these amounts will not be included in retention calculation. For all other amounts in the payment certificate retention shall be applied including Contingencies.