When is no retention required?

When is no retention required?

• A. 50% of the contract
• B. 25%
• C. 75%
• D. 100%

Answer: (A)

Retention is the holdback of a portion of progress payments to safeguard performance and quality until the work is completed and accepted. The idea behind no retention at a certain point is that once enough of the project is finished, the risk to the owner decreases enough to stop withholding funds. In this context, when 50% of the contract work is completed, the policy allows releasing the remaining payments without further retention. This mid‑point milestone provides a balance: the contractor has demonstrated substantial progress, while the owner still has enough leverage through acceptance criteria and final checks to ensure proper completion. The other percentages reflect other milestones or funding rules, but they do not meet the condition where no retention is required.

Retention is the holdback of a portion of progress payments to safeguard performance and quality until the work is completed and accepted. The idea behind no retention at a certain point is that once enough of the project is finished, the risk to the owner decreases enough to stop withholding funds. In this context, when 50% of the contract work is completed, the policy allows releasing the remaining payments without further retention. This mid‑point milestone provides a balance: the contractor has demonstrated substantial progress, while the owner still has enough leverage through acceptance criteria and final checks to ensure proper completion. The other percentages reflect other milestones or funding rules, but they do not meet the condition where no retention is required.