The contract allows retainage on progress payments. What does retainage mean in pay-application administration?
Correct Answer
B) A portion of earned payment withheld until later contract milestones or completion
Retainage is a withheld portion of otherwise earned progress payment, held until later milestones or completion under the contract. Other choices confuse retainage with bonuses, taxes, or bid structure.
Why This Is the Correct Answer
Retainage is a withheld portion of otherwise earned progress payment, held until later milestones or completion under the contract. Other choices confuse retainage with bonuses, taxes, or bid structure.
Why the Other Options Are Wrong
Option A: Classify the condition as a bonus paid before mobilization
In procurement and contracting, A bonus paid before mobilization is the wrong selection for Retainage: the choice would not get the project to A portion of earned payment withheld until later contract milestones or completion, which is the Retainage result verified by the source.
Option C: Classify the condition as a sales tax exemption for materials
Choice C gives A sales tax exemption for materials. Its specific error: it points to A sales tax exemption for materials, but.
Option D: Classify it as a separate bid alternate
Choice D (A separate bid alternate) is rejected because it names a financial document or payment mechanism, not the Retainage action/result stated by A portion of earned payment withheld until later contract milestones or completion.
Memory Technique
File retainage under a inspection mark: condition first, number or duty second, answer A portion of earned payment withheld until later contract milestones or completion.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Retainage in progress payments" to confirm that Retainage is a withheld portion of otherwise earned progress payment, held until later milestones or completion under the contract.
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