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COA Cir No. 82-101-G-Application of 10% Retention Payments

This circular clarifies the application of the 10% retention on government contract payments. [1] The 10% retention applies to all construction contracts to ensure funds are available to remedy any defective works. [2] The retention is based on 10% of the amount due prior to deductions and is withheld from each progress payment until 50% of works are completed. [3] If work is on schedule and satisfactory after 50% completion, no further retention is withheld, otherwise the 10% continues until final acceptance when all retention money is due for release.

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650 views1 page

COA Cir No. 82-101-G-Application of 10% Retention Payments

This circular clarifies the application of the 10% retention on government contract payments. [1] The 10% retention applies to all construction contracts to ensure funds are available to remedy any defective works. [2] The retention is based on 10% of the amount due prior to deductions and is withheld from each progress payment until 50% of works are completed. [3] If work is on schedule and satisfactory after 50% completion, no further retention is withheld, otherwise the 10% continues until final acceptance when all retention money is due for release.

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crizalde m. de dios
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We take content rights seriously. If you suspect this is your content, claim it here.
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COMMISSION ON AUDIT CIRCULAR NO.

82-101-G January 28, 1982

TO : All Heads of Ministries, Chiefs of Bureaus/Offices, Regional Directors of the


different Ministries; Managing Heads of Government-Owned or Controlled
Corporations, including Educational Institutions and Self-Governing Boards,
Commissions or Agencies of the Government; Provincial Governors/City Mayors;
COA Managers/General Counsel; COA Regional Directors, All Corporations;
Provincial, City, Bureau and Unit Auditors and Other Concerned.

SUBJECT : Application of the 10% Retention to Contract Payments.

The following clarifications in accordance with the provisions of P.D. 1594 are hereby
made in relation to the application of the 10% retention to contract payments:

1. The 10% retention on contract payments shall be applied to all government


construction contracts for the purpose of insuring that should there be defective
works of the contractor prior to acceptance of the work, the government has the
means to compel the contractor to remedy defective works or use the money
retained to pay other parties to correct the defect in a manner satisfactory to the
government. For other types of contracts such as those for professional
services, like architectural, engineering, and consultancy services, unless the
contract itself specifically provides for the 'retention money' then the10%
retention shall not apply.

2. The retention shall be based on the amount due the contractor prior to any
deduction and shall be retained from every progress payment until fifty percent
(50%) of the value of the works, as determined by the government, are
completed. If after fifty percent completion, the work is satisfactorily done and is
on schedule no further retention shall be made otherwise the 10% retention shall
continue to be imposed.

3. The total 'retention money' shall be due for release upon final acceptance of the
works.

Please be guided accordingly.

For the Commission:

(SGD.) FRANCISCO S. TANTUICO, JR., Acting Chairman

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