Performance Retention (Deckungsrücklass) in Procurement
Performance retention: contractor security withheld from the contract price to cover warranty claims. Typically 5% of the final account. § 1170b ABGB. An Austrian-specific concept.
Definition: The performance retention (Deckungsrücklass) is a security commonly used in Austrian construction contracts. The client withholds part of the contract price – typically five per cent of the final account – in order to secure warranty claims against the contractor after the works have been accepted.
Last updated: January 2026 · Legal basis: § 1170b ABGB, ÖNORM B 2110
What is the performance retention?
The performance retention is a purely Austrian instrument for securing construction contracts: an agreed percentage of the contract price is withheld by the client and paid out only once the warranty period has expired, provided no defects have been raised.
It serves as financial protection for the client in case defects appear after acceptance which the contractor is liable to remedy. Without a performance retention the client would have to bear the cost of remedying defects in the first instance and then sue the contractor for reimbursement.
The concept does not exist in this form under German procurement law, where similar safeguards are addressed through general contract clauses or the VOB/B.
Significance in award procedures
The performance retention is not a procurement-law instrument in the strict sense but a contractual security routinely provided for in the tender documents and contract clauses of public clients.
Typical configuration:
- Amount: As a rule 5 % of the final account (gross or net, depending on the agreement)
- Retention period: During the warranty period, which under § 933 ABGB is three years for construction works on immovable property in Austria
- Substitution: The contractor may substitute the retention with an equivalent bank guarantee and so receive the withheld amount immediately
- Release: Once the warranty period has expired with no outstanding defect notices, the withheld amount or the bank guarantee is released
The statutory basis for security in the contract for work is § 1170b ABGB. ÖNORM B 2110 (General Contract Provisions for Construction Works) sets out the detailed rules for performance retentions in Austrian construction contracts.
Related terms
Last updated: January 2026 All information provided without warranty. For legally binding advice please contact a law firm specialising in procurement law.
Book a demo.
See what BOND finds for your company — tenders, suppliers, and partners you'd never discover on your own. Cancel any month, anytime.