(DRAFT) Commitments: Configure Sliding Scale Retention Settings

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Feature Announced: Month DD, 2019
Feature Released: COMING SOON!

Commitments: Configure Sliding Scale Retention Settings

If you are a Procore company is Australia or New Zealand, Procore is releasing an update to the Commitments tool that provides users with the ability to set sliding scale retention rates. These rates can be applied to a commitment (for example, a purchase order or a subcontract) using up to five (5) unique rules. Each rule lets you define retention settings using these three (3) methods:

X% of Y% of Original Commitment Value is Held. Select this option to base the retention rate on a percentage of the original commitment value that you specify.
X% of Y% Revised Commitment Value is Help. Select this option to base the retention rate on a percentage of the original commitment value that you specify.
X% of Y$ Amount is Held. Select this option to base the retention rate on a percentage of an amount that you specify.

With this update, you can configure sliding scale retention that Procore applies to invoices on an individual commitment, using the new controls in the Advanced Settings tab. The system will apply retention settings to all new invoices for the selected commitment. If you change the retention settings on a commitment, those changes will only be applied to new invoices. Retention setting updates cannot be applied to invoices retroactively.

Example

The image below shows you the new Sliding Scale Retention area that's been added to the Advanced Settings tab in a commitment.

Common Questions

What is sliding scale retention?
When would I use sliding scale retention?
How do I enable the sliding scale retention feature?
How do I add sliding scale retention rules on a commitment?

What is sliding scale retention?

Sliding scale retention refers to the percentage of a contract amount that is withheld from a subcontractor based on a specified rule.

EXAMPLE

Below is an example showing how sliding scale retention might be applied in your environment:

A general contractor will withhold 10% of the contract funds until 5% of the original commitment value is held.
2.5% is released at the end of the main works with the' Practical Completion' invoice. For example, 100% of all Schedule of Value (SOV) line items are 'Approved' in the subcontractor invoice.
2.5% is released (resulting in zero retention), twelve (12) months after the 100% Practical completion invoice. This is typically referred to as the end of Defects Liability Period (DLP).
Note: Retention held during any period may be used by the General Contractor (a.k.a., the 'Builder') should the subcontractor fail to remedy works or comply with lawful contract instructions.

When would I use sliding scale retention?

For Procore customers in Australia and New Zealand, industry best practices and a need to remain in compliance with Building and Construction Industry Security of Payment Act makes an adjustable setting for retainage holdings on subcontractor invoices an imperative. By providing general contractors with a way to automatically adjust retention holdings using a pre-defined calculation method, your company can stay in compliance with contractual and governmental requirements.

How do I enable the sliding scale retention feature?

If you are a Procore customer in Australia or New Zealand, please ask your company's Procore Administrator to send an email request to your Punto de contacto de Procore.

How do I add sliding scale retention rules on a commitment?

To add up to five (5) sliding scale retention rules on a commitment:

Navigate to the Commitments tool.
Locate the commitment that you want to add an sliding scale retention rule for. Then click Edit.
Click Advanced Settings.
Under Advanced Settings, click Edit.
Scroll down to Sliding Scale Retention.
Click the setting next to Enable Sliding Scale Retention until a GREEN checkmark appears.
This action turns the sliding scale retention feature ON for the selected commitment.
Click Add a Rule.
Do the following:
1. Percentage. Enter the retention rate as a numeric percentage. For example, if you want to retain 10% of the contract funds until 5% of the original commitment value is held, enter: 10
2. Percentage. Enter the numeric percentage that corresponds to the retention rule that you are creating. For example, if you want to retain 10% of the contract funds until 5% of the original commitment value is held, enter: 5
3. Rule. Select the rule that you want to apply.
  Note: You can add up to five (5) rules for calculating sliding scale retention. Each rule can use one of these three (3) methods:
  - X% of Y% of Original Commitment Value is Held. Select this option to base the retention rate on a percentage of the original commitment value that you specify.
  - X% of Y% Revised Commitment Value is Help. Select this option to base the retention rate on a percentage of the original commitment value that you specify.
  - X% of Y$ Amount is Held. Select this option to base the retention rate on a percentage of an amount that you specify.
Click Save.