General Inquiries

Retainage held on material suppliers?

  • 1.  Retainage held on material suppliers?

    Posted 11-26-2019 12:50
    Hello, CFMA General Inquires.

    Currently I am working for a General Contractor and one of our Subcontractors is holding retainage from their material supplier and their supplier has sent a lien notice. In my experience previously working for an Electrical Contractor and a General Contractor prior we would not hold retainage from our material suppliers.  Our Subcontractor refuses to pay or endorse joint check using progress billing/ payment.  They are adamant about waiting for retainage to be paid out prior to paying their material supplier.   This is a first for me and I think unusual.   Do any of you'll (or your Subcontractors) have agreements with  material only suppliers to withhold a percentage for retainage?

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    Jordan Anderson ,CCIFP, CRIS
    Controller
    Holchemont, LTD
    McAllen TX
    (956) 686-2901
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  • 2.  RE: Retainage held on material suppliers?

    Posted 11-27-2019 07:20
    Retainage on material suppliers? I have seen retainage held only on large P.O.'s involving production equipment although typically it is not called retainage but some percentage maybe held on an equipment purchase pending equipment start up. As far as general material suppliers your sub is a 1st in my experience. Since the material supplier has filed a lien it would seem that your sub has defaulted on the payment terms with the supplier probably puts them in breach of your contract with the subcontractor. I would not pay any further progress payments for one and probably send notice that they are in breach of contract. However, as you may guess all this depends upon the contract language between everyone. Good luck.

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    Charles Smith CCIFP, CRIS
    Vice President-Controller
    Peterson Beckner Industries Inc.
    Houston TX
    (281) 716-4725
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  • 3.  RE: Retainage held on material suppliers?

    Posted 11-27-2019 08:58

    Good morning All..

     

    Our contract is with the subcontractor only.  As a GC we do not make demands on the subs suppliers.  Materials are cash and carry with no labor and they should not have to hold retention on goods supplied.

     

    Jill A. Maly

    Accounts Payable Coordinator

    (O) 310-450-5661 Ext. 227 

     (E)  jmaly@mfrg-icon.com

     

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  • 4.  RE: Retainage held on material suppliers?

    Posted 11-27-2019 11:17

    No – we have never held retainage from our material supplier.  I have never heard of such a thing.  The subcontractor sounds difficult to work with.  I don't think I would be using them on future jobs.  Good luck.

     

    acClrInc.jpg.

    Barbara Kuntz

     

    2904 N. Madelia St

    PO Box 7339
    Spokane, WA 99207

    P. 509 | 489.0563

    F. 509 | 489.0574

    barb@acispokane.com