CE NCARB practice exam question

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zoecyphers

January 29, 2025 01:50

 

Hello. I think I'm missing a fundamental piece of retainage/schedule of values. In this question, we take out retainage (10%) of 'work completed' and 'materials stored', before we pay the contractor. What is the relationship between this 10% and the 'Retainage' column? Why do they both exist? Is it redundant in any way?

I would think that with each updated schedule of values, the retainage column grows in value accordingly with the work completed and materials stored. So holding 10% retainage from work completed and materials stored seems redundant in this problem. 

I hope this makes sense!

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  abruno168 January 29, 2025 14:38

  The retainage as a percentage helps to find the retainage amounts in the schedule of values. You're right that the retainage column will increase and grow with each payment application and work completed. 

  It's relevant to this problem due to the 90% completed sitework retainage being withheld that can be released based on the owner-contractor agreement, and relevant because on this payment application, the amount to be paid applies to the work completed and materials stored this period minus the 10% withheld for retainage this period. The percentage is important to determine what is being paid for work completed this period and if any amount retained can be paid out based on the thresholds lined out in the agreement.

  Totals in the retainage column will grow until 90+% of the work is completed, and each payment application amount to be paid will be 90% of the work completed and materials stored that period with 10% held for retainage from each payment application, and any portions that reach that 90% completed threshold. 

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  adampere January 31, 2025 15:40

  I picked A and had the same confusion as well thinking "why are we adding a second 10% of retainage?" The 10% retainage has already been accounted for, so we're not adding more retainage. We're trying to find out how much the contractor should be paid, so we just need to subtract the 10% retainage from This Period and Materials Presently Stored (while adding the Sitework retainage) to get the correct payment amount.

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  zoecyphers January 31, 2025 18:03

  adampere "subtract the 10% retainage from This Period and Materials Presently Stored (while adding the Sitework retainage)"

  Thank you very much for your response! That clears up the confusion. Much appreciated. 

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