Retainage is used to ensure payment to which party?

• A. Sub-suppliers by the prime contractor
• B. The project owner
• C. The architect
• D. The government

Answer: (A)

Retainage is a financial safeguard that ensures those who provide labor and materials—down the chain—get paid even if the project faces delays or payment issues. The money is withheld from payments to the prime contractor, who then uses this retained portion to ensure sub-suppliers and other downstream trades receive what they’re owed. This mechanism protects everyone further down the line and helps prevent liens or disputes from unpaid suppliers. It’s not about guaranteeing payment to the project owner, the architect, or government bodies; it’s about making sure sub-suppliers are paid for their work.