is an allowance for retention bonds. The contract also allows for retention to be withheld only on the labour-element of any price or only to be applied on the final few payments made. The NEC system also has an option to allow the use of project bank accounts in lieu of retention. United States Creation and enforcement If there is to be retainage on the construction project, it is set forth in the construction contract. Retainage provisions are applicable to subcontracts as well as prime contracts. The amount withheld from the contractor or subcontractor should be determined on a case-by-case basis by the parties negotiating the contract, usually based upon such factors as past performance and the likelihood that the contractor or subcontractor will perform well under the contract. One can structure retainage arrangements in any number of ways. Subject to state statutory requirements, 10% is the retainage amount most often used by contracting parties. Another approach is to start off with a 10% retainage and to reduce it to 5% once the project is 50% complete. A third approach is to carve out material costs from a withholding requirement on the theory that suppliers, unlike subcontractors, may not accept retainage provisions in their purchase orders. Retainage clauses are usually found within the contract terms outlining the procedure for submitting payment applications. A typical retainage clause parallels the following language: "Owner shall pay the amount due on the Payment Application less retainage of [a specific percentage]." Substantially Complete Retainage is generally due to the contractor or subcontractor once his work is substantially complete. Disputes often arise regarding just when substantial completion occurs. The standard analysis finds the event triggered when the owner can occupy a structure and use it for its intended purpose. Retainage abuse Subcontractors tend to bear the brunt of retainage provisions, especially subcontractors performing work early on in the construction process. The main reason for this, is because many contractors pass down the owner's right to withhold retainage to the subcontractor, but frequently withhold more than is being withheld from them. For example, a subcontractor performing site work may complete its work in the first few months of the construction project, but generally is not allowed to recover the amount withheld from the owner and contractor until the project is "substantially complete", which could take a few years depending on the size of the project. Coupled with