#WiseUpWednesday: QS cash vampires

You may have seen this. It’s yet another grim headline from Construction Enquirer and a sad reflection of the widespread abuse of Subbies by Main Contractor’s QS’s.

It’s a sickening state of affairs which is getting worse by the day as cash strapped Main Contractors use every trick in the book to reduce and delay your payments.

When you’ve poured your heart and soul into getting the lads organised, persuaded the suppliers to get the gear to site when you needed it, and filled in the missing design details – so you could actually get the job done, what reward do you actually get?

In fact Roger, the sleek haired 30 something QS in his pin striped suit and crisp white shirt is probably going to say; “Who instructed you to do that? We aren’t paying you without an instruction, you’ve delayed us …

If that sounds all too familiar read on.

The people who say they are working towards a solution such as Build UK, are so far removed from the grim reality of life that they haven’t got a clue. Their position is that there is a Government 30 day prompt payment policy in place, so everything will be well…

Frankly it’s total BS!

The formation of Build UK has not solved the problem of payment disputes. How can it when its Main Contractor members beat up the Specialist Contractor members?

Main Contractors and Subbies are oil and water, they don’t mix. Bully boy members stealing from the weaker members…

What basis is that for an organisation that’s meant to be “Leading the Construction Industry”. Leading it to it’s death more like…

The payment problems in the construction industry and the fact that Main Contractors simply bully their Specialist Contractors into submission has prevailed for years, with nobody – certainly not the Government – showing any enthusiasm to change it.

 

Specialist Contractors continue to go bust as payments never materialise, and it’s ironic how the problems on projects never arise until the work is completed and the final account is submitted…

So What’s The Answer?

  • Firstly, StreetwiseSubbie works exclusively with you the Specialist Contractors in order to, resolve your immediate payment problems and recover monies owed to you.
  • Secondly, we give you the tools and skills you need to ensure that you do everything you can to avoid problems in the future
  • Thirdly, if things go wrong, we stop you being be bullied into simply doing what the Main Contractor says without getting paid for it.
  • And last but not least we provide a whole range of dedicated business support services specifically tailored to your needs as a Specialist Contractor.

So, if you need help with any of your business problems why not check out how we can help you with our low cost high value service at: Buddy Details.

Alternatively you can call us on 01773 712116, or email info@streetwisesubbie.com

Act Quickly

If your account comes under attack from a “QS Cash Vampire” the best advice is to act quickly and to take appropriate advice. Our Professional Consultants have decades of experience in contractual and commercial matters and will give you no-nonsense, practical advice that won’t blind you with legal jargon.

Here’s that link again: Buddy Details

So, if you need any help with any of your business issues, including fighting back against the “QS Cash Vampires”, please don’t hesitate to email us at info@streetwisesubbie.com, or pick up the phone and give us a call on 01773 712116.

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#WiseUpWednesday: The NEC3 is dangerous…

The NEC/3 Engineering and Construction Subcontract is becoming increasingly popular throughout both the public and private sector. But, it can be extremely dangerous for Specialist Contractors.

Why do I say this?

The Nec/3 is meant to be easy to use and understand because of;

  • its simple language, and
  • its approach to effective management

The idea behind it is that risks are identified as part of the contract, and proactively managed at the time, rather than battled out afterwards.

Does that sound like any of the Main Contractors you know?

“Risks proactively managed” – “at the time” – forgive me for being blunt, but most Main Contractors couldn’t manage the proverbial p*** -up in a brewery…

Although the ethos of the NEC3 makes a lot of sense, the fact of the matter is that life is never that simple.

Risks and Challenges

It’s not just me that’s saying it. Various experts have warned of the dangers of the NEC3.

EC Harris, for example, said:

“We are seeing an increasing number of disputes with NEC contracts, clients and contractors don’t understand how different it is to JCT contracts and get themselves into a bit of mess.”

So, what are the risks and how do you avoid them?

Plain English – But Not Plain Enough?

In an attempt to escape the complexity and “legalese” of other more traditional contracts, NEC3 is written in plain English, in the present tense, and avoids the use of legal terminology.

However, it’s been argued that this actually creates ambiguity, particularly as much of the rest of construction, the law and our legal system operate in a completely different style. And even a high court judge has complained that the use of the present tense makes referral to adjudication or other tribunals difficult to construe as a result.

The judge said: “No doubt this approach to drafting has its adherents within the industry but … it seems to me to represent a triumph of form over substance.”

New Concepts

The NEC3 introduces a raft of new concepts. Terms such as “risk register”, “activity schedule”, “compensation events” and various other schedules including “Subcontract Data” will all be new to those who have not used this form before.

The collaborative “management tool” approach of the form, and its usefulness as a contract document can be negated by;

  • Lack of understanding
  • Being badly compiled (by the Contractor)
  • Being heavily amended (again by the Contractor)

Managing Risk

The management approach of the contract aims to ensure risks are clearly defined, monitored, identified and managed from an early stage.

However, most Contractors aren’t very good at that, so they still want to push the risk in your direction…

Interpretation Of Key Fundamentals

It’s essential that you understand such issues as the “Early Warnings” mechanism and how Compensation Events are intended to work.

What are “Compensation Events”? In broad terms they’re variations to you and me, but the NEC3’s valuation and agreement processes are substantially different from the valuation process in say a JCT contract.

Time is another big problem under the NEC3, because the contract makes it clear how very important the contract programme is as both a management and a commercial tool. The programme has to reflect everything we know about the works as it happens, and you have to submit your programme for “acceptance” before you start and every time anything changes.

What happens if you’re doing that?

Then you are at risk, plain and simple. Don’t say you haven’t been warned…

Onerous Amendments

Specialist Contractors are at risk whenever a standard Form Contract is amended, but NEC3 is particularly troublesome in this regard. Here are just some of the reasons why;

First, most Contractors are familiar with JCT forms of contract, and attempt to add JCT type clauses, or even directly take JCT clauses and add them to the NEC. Conflicting language will lead to unpredictable results, and pose real problems should a dispute arise.

Secondly, the contract defines precise time limits for communication and responses by both parties. Ordinarily this means Contractors have to reply promptly to notifications and quotations in respect of Compensation Events and get things agreed.

Thirdly, failure to reply within the allocated time carries express sanctions within the NEC. Such provisions are drafted so that both parties agree the cost and time effect of Compensation Events in a prompt manner.

That’s all unfamiliar territory for most Contractors!

 

Finally, understanding risk apportionment under NEC3 is crucial. It’s important to understand this in order to avoid being caught out by risks being unfairly “re-arranged” by the Contractor.

Success Or Catastrophic Failure

It would appear, then, that the key aspects for successfully working with NEC are understanding, pro-active project management and communication.

When coupled with good advice, working with NEC3 can be successful. But please be warned that the key is understanding. Without that you may be risking catastrophic failure.

We are regularly called in to help resolve problems with NEC3 contracts after the event, and of course we can help you with that. But, training and education can help you to avoid the problems before they happen and we can help you with that too.

Together we can make a real difference.

#WiseUpWednesday:Will 2017 Be Better Than 2016?

For most Specialist Contractors the last couple of weeks have been a very important time of the year.

 

First, for many it’s one of the few proper breaks you get with a lot of sites closed over the Christmas break. I hope you got time to enjoy the results of your efforts in 2016, or chill out, relax and reflect on things if it wasn’t such a great year.

How To Make 2017 Better Than 2016

 

The break between Christmas and New Year – is also a great time where we can take a step back and really start to plan for the year ahead.

 

Most business owners hope for a successful new year. Those who achieve it have put some serious thought into how it’s going to happen.

For the smart Specialist Contractors 2017 could be a bumper year, but for those that don’t wise up it could be a very dangerous year indeed…

 

So, here’s your opportunity to be one of those smarter Specialist Contractors and discover those secrets that will ensure your business success.

 

7 Key Secrets That Will Ensure You Have A Happy & Successful 2017

 

1 Know who you are working for: Watch out for companies acting as agents, dormant companies, companies of straw and companies registered in other jurisdictions.

Some of the biggest companies including Balfour Beatty use these types of arrangement, and they can create real obstacles when you try to get paid.

 

2 Understanding your obligations: Understanding the how, what, when, were and extent of your liability is crucial to ensure that it doesn’t come back to bite you!

Watch out for dubious “value engineering” practices and make sure that you check the contract thoroughly to ensure it reflects what has been agreed.

Yes it’s a pain and yes it can be tricky, but if you’re not sure get good advice. Our experts can check contracts quickly and cost effectively, so give us a call.

 

3 Not all contracts are the same: If you don’t recognise the onerous terms of the contract you are highly likely to be one of the business failures of 2017…

You may not be surprised to hear that most contracts we check for Specialist Contractors are stuffed full of onerous terms and conditions. But, what may surprise you is how often we can get onerous terms taken out or amended, and get the Contractor to agree to fair and reasonable terms.

 

4 Don’t create your own problems: Make sure that you don’t fall into the Contractor’s trap of taking no action when problems occur. Or they will steal your money to make their profit margin.

Please do not fall for their – “no need to be contractual” B.S.

Sorry, but there is every need to follow the contract, and if they interpret that as being “contractual” then so be it. You can be sure they will be “contractual” if you step out of line.

 

5 Price, profit and promotion: How to make sure you are one of the success stories of 2017.

Trust me, we make “marketing” simple. Yes there is a lot of B.S. out there about marketing, and most of the books on the subject make my brain hurt.

And if you think getting on a tender list is all there is to it, then sorry to burst your bubble but almost anyone can do that. After all how much does it cost a Contractor to send you an enquiry? Basically nothing, so the Contractor doesn’t care how many he sends out…

But, getting the right kind of enquiry, from the right Contractor, and marketing your business for maximum profits is easy with our help and advice – we can even do it all for you.

 

6 How to get paid: I reckon the biggest single challenge that you faced in 2016 was getting paid. And I’m sorry to break this to you, but making sure you get paid on time without deductions is going to be an even bigger challenge in 2017…

Whilst this time of year can be relaxing, it can also be extremely stressful, as tight-fisted Contractors may have hung on to your money over the Christmas period and will still do so into the New Year.

There are weapons in your armoury that you probably don’t even know you’ve got, so don’t stand for late or underpayment. Take action…

We can sort the late payers out for you, just give our team a call on 01773 712116.

You can also get lots of useful information with our: How To Get Paid Report

 

7 Take action: Learn how to take action to ensure your success in 2017.

Whatever level your business is at, I want to encourage you to wonder if there’s something more.

 

More to know, more to learn, more to experience and enjoy and be.

 

A better more profitable, enjoyable, less stressful way.

 

But, unfortunately what got you here won’t get you there…

 

Because the old adage that “if you always do what you have always done – you will always get what you’ve always got” is so very true.

 

So, if you have had a tough time for the last few years, and yet you still keep working with the wrong kind of Contractors or Clients who will sap your strength and steal your profits, then maybe it’s time for a new approach.