Retention Bond
Definition
A retention bond is an alternative to cash retention, where the contractor provides a bond (from a bank or insurance company) in lieu of having cash withheld from interim payments. For subcontractors, a retention bond avoids the cash flow impact of having retention withheld on every payment.
In construction tendering, this means...
Retention bonds are increasingly used as alternatives to cash retention, driven by legislation and industry pressure to improve subcontractor cash flow. For GCs, accepting retention bonds from subcontractors requires assessing the creditworthiness of the issuing institution and understanding the claim process if the bond needs to be called.
Related terms
Takshy automates the parts of the tendering process that involve retention bond, extracting scope, managing documents, and keeping your workflow organised from first document to final award.
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Understanding the terminology is step one. Takshy handles the rest, from extracting scope from project documents to sending structured RFQs and managing the returns.
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