Retention in construction contracts - publishing requirements: CPN 1/2024
This construction policy note (CPN) advises public bodies of new requirements for publishing information on their use of cash retention in construction contracts.
Purpose
This Construction Policy Note (CPN) advises public bodies of new requirements for publishing information on their use of cash retention in construction contracts.
Key message
Scottish Government’s long-term aspiration is to reduce or remove the need for retentions. Key to this is visibility of policy and practice across the public sector.
Background
Scottish Government published guidance on the use of cash retention in construction contracts in CPN 3/2022, which became effective on 20 February 2023. It requires retentions, where they are considered necessary, to be applied carefully and fairly as the commercial element of a project delivery strategy seeking to eliminate potentially defective work.
This CPN implements a further two recommendations, agreed by Scottish Ministers, from the report of the short life working group on retentions. They will be incorporated into the Retention in Construction Contracts chapter of The Client Guide to Construction Projects with the following aims:
- to raise awareness of retention use in the public sector
- to promote transparency among public bodies
- to facilitate knowledge, understanding and decision-making among contractors
Target audience
This CPN provides guidance to assist public bodies plan, procure and manage construction projects. It should also be of assistance to contractors and consultants alike in developing their understanding of how the public sector delivers construction projects. It is applicable guidance under the Scottish Public Finance Manual.
Publication
Using the guidance set out in annex A, each public body in scope of these provisions is required to undertake the following actions:
- by 31 August 2024, publish a retention policy statement on its website and then review and where necessary revise it by each subsequent 31 August thereafter
- from 20 February 2025, publish a retention policy compliance statement on its website for every project, initially as soon as possible after practical completion, whose contract was awarded on or after 20 February 2023
Templates are provided to help public bodies structure and populate their statements. They are available, on request, from the Construction Procurement Policy Unit.
Contact
E-mail: propertyandconstruction@gov.scot
Web pages: construction procurement
Post:
The Construction Procurement Policy Unit
The Scottish Government
3B South, Victoria Quay
Edinburgh
EH6 6QQ
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