Is it Worth the Risk?

This week’s Wise Up Wednesday is about one of the biggest of all the challenges that Specialist Subcontractors face. Taking unnecessary risks must be the one that causes the most significant problems.

Construction is a tricky balance of risk against rewards, so if you’re frightened of risk, then you should find another way of earning a living. But that does not mean that risk is something to be ignored.

Here are some ways of recognising and controlling the risks you are taking:

  1. Ensure you know exactly who it is that you will be entering into contract with.
  2. Check their financial credentials.
  3. Identify the risks and responsibilities at tender stage.
  4. If the risks are unacceptable, consider withdrawing.
  5. Price for the risks.
  6. Qualify or reduce risk by negotiation.
  7. Ensure the contract incorporates what you have agreed.
  8. Manage the risks.

The best time to check the contract, is before you commit resources to the costly process of producing your tender. But, if for whatever reason you haven’t done that, and you are asked to start work on the basis of some previously unseen terms and conditions, you need to check for onerous conditions.

These might include:

  • terms that nullify the benefits of the Construction Act
  • onerous amendments to Standard Form contracts
  • use of in-house forms of contract
  • excessive liquidated damages or unlimited damages
  • extended payment periods
  • non-payment for unfixed materials
  • conditions precedent for payment
  • excessive discount
  • extended retention periods
  • onerous set-off arrangements
  • onerous performance bonds and warranties
  • enforced acceleration without payment
  • lack of firm programme dates and periods
  • suicide terms such as ‘to suit main contractor’s progress’
  • excessive design or co-ordination responsibilities
  • unworkable protection obligations
  • responsibility for checking previous works of other trades

There’s a whole mountain of potential risk right there!

Want To Know More?

If you would like to know more about the ways to Minimise Risk and Maximise Profit, that we have been putting into practice on behalf of Specialist Subcontractors for the last 27 years, I would like to invite you to our exclusive March Seminars.

You will have a thoroughly enjoyable delay where you can enjoy the company of other Specialist Contractors at this exclusively “Subbies” only event.

The atmosphere is relaxed and the presentations are down to earth and user friendly, packed with real life examples of what to watch out for, and all the information that you need to minimise risk and maximise the profitability of your business.

And as all the venues are specifically chosen for ease of access you’re sure to have a great day, where you can network, learn and share ideas in a vibrant and relaxed atmosphere.

The secrets are being revealed at our March events;

“Understand Your Contract to Minimise Risk and Maximise Profit”

“Introduction To Contractual Awareness and Using JCT Subcontracts”

WHEN/WHERE IS IT? The dates and fast access venues are as follows;

Quick, you can still book for tomorrow’s event, as well as two more later this month:

15 MarchOulton HallLeeds close to M1 and M62

22 March – The Nottingham BelfryNottingham close to M1 J26

29 March – The Village HotelCoventry close to M6 and M40

WHAT DOES IT COVER?

We will be unlocking the Secrets To Minimising Risk and Maximising Profit in a straightforward down to earth easy to follow style using real life examples.

Here’s what your fellow Subcontractors said about our last event;

“Easily digestible information delivered in an interesting and easy to understand format”

“Very detailed and informative”

“Very informative and well delivered”

“We were struggling to get paid; not any longer!”

THE HEADLINES

  • Session 1 – Contract Formation
  • Session 2 – Introduction to JCT Contracts and Construction Act
  • Session 3 – Time, Notices and Delay and Disruption
  • Session 4 – Instructions, Variations and Maximising Return
  • Session 5 – Getting Paid On Time and the Right Amount
  • Session 6 – Resolving Conflicts and Disputes
  • Session 7 – Putting It All Together

WHO SHOULD ATTEND? This is exclusively for Specialist Contractors and is designed specifically to provide a broad appeal for Specialist Contractors staff who work with contracts which includes;

  • Estimators,
  • Contracts Managers;
  • Project Managers;
  • Commercial Managers,
  • Quantity Surveyors,
  • Credit Controllers and
  • Directors

WHAT WILL WE GET OUT OF IT? The Secrets To Minimising Risk and Maximising Profit, including the best information available to resolve the all important problem of How To Get Paid!

Specialist Contractors don’t get paid because they don’t understand the contract or don’t apply it when they should. We will reveal all you need to know to enable you to understand the fundamentals of those subcontracts, and how to get paid.

WHAT DOES IT COST? You can book now for preferential discounts and rates – but be quick to ensure you receive your Early Booking Discount!

Book within the next few days and instead of paying £350, you can pay just £315.00 saving you 10% off the standard price.

Book two or more places and you can pay just £280 each saving you 20% off the standard price.

Special rates apply for our Buddies (members) – please ask Tanya for details.

All rates are subject to VAT

Booking couldn’t be simpler, just contact Tanya directly on 01773 712116 or tanya@streetwisesubbie.com to confirm your places and she will take care of the rest. She is brilliant!

But hurry our last round of seminars sold out very quickly.

Please remember that we are here to provide solutions exclusively for Subcontractors. If you want access to professional solutions that work, then please give us a call on 01773 712116, or email info@streetwisesubbie.com today.

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Use The Power Of  A Scott Schedule!  

In this week’s post I want to talk about Scott Schedules, and how you can use them to get your interim and final accounts agreed.

Scott Schedules were originally developed by George Alexander Scott, a surveyor and official referee (a circuit judge to you and me), for use in building disputes.

They are now commonly used for a variety of legal cases that involve complex cases where there are are numerous claims, and especially your interim and final accounts which almost always include variations, or in the case of NEC contracts “Compensation Events”.

A Scott Schedule is essentially a spreadsheet, pretty impressive given that Scott died in 1933, some 52 years before Microsoft released Excel. Originally prepared by hand. they are now commonly prepared on Excel and have inputs from both the claimant and respondent.

Typically you will be the the claimant and you will set out your argument first, e.g. your application for payment including variations, then the schedule is passed to the respondent to set out their response i.e. their valuation.

This requires a degree of collaboration between the parties, but it is one of the very best ways of being absolutely clear about what you are claiming and what the Contractor is valuing and paying.

We Already Do That

A lot of Specialist Contractors do submit interim applications on some form of spreadsheet, but a lot don’t, and of those that do few are using their power to the full. I’m not talking about their computing power, I’m talking about their contractual power.

What do I mean by that? Well, if your account doesn’t get settled you will need it resolved by way of adjudication, arbitration or litigation. Whichever option is appropriate, the parties set out their positions in a Scott Schedule and the final column in the schedule is provided for the adjudicator, arbitrator, or judge to give their decision against each item.

So, starting with the end in mind is a great way to put contractual power behind your claims!

The Power Of Scott Schedules

The Technology and Construction Court (TCC) guide describes a Scott schedule as ‘…a table, often in landscape format, in which the Claimant’s case on liability and quantum is set out item by item in the first few columns and the Defendant’s response is set out in the adjacent columns’.

The guide suggests it is suitable for ‘…claims involving a final account or numerous alleged defects or items of disrepair’ and that ‘…even where all the damage has been caused by one event, such as a fire, it can be helpful for the individual items of loss and damage to be set out in a Scott Schedule.’

The TCC suggests that the power of Scott schedules is in the information provided and their brevity, proposing that excessive repetition should be avoided. The response should be clear and specific, dealing with each issue and providing statements that make clear which claims are admitted or agreed, which are denied and why.

And that’s why you can use them at an early stage in negotiation to get your account agreed well before it becomes a dispute.

Want To Know More?

If you would like to know more about the ways to Minimise Risk and Maximise Profit, that we have been putting into practice on behalf of Specialist Subcontractors for the last 27 years, I would like to invite you to our exclusive March Seminars.

You will have a thoroughly enjoyable delay where you can enjoy the company of other Specialist Contractors at this exclusively “Subbies” only event.

The atmosphere is relaxed and the presentations are down to earth and user friendly, packed with real life examples of what to watch out for, and all the information that you need to minimise risk and maximise the profitability of your business.

And as all the venues are specifically chosen for ease of access you’re sure to have a great day, where you can network, learn and share ideas in a vibrant and relaxed atmosphere.

The secrets are being revealed at our March events;

“Understand Your Contract to Minimise Risk and Maximise Profit”

“Introduction To Contractual Awareness and Using JCT Subcontracts”

WHEN/WHERE IS IT? The dates and fast access venues are as follows;

15 March – Oulton HallLeeds close to M1 and M62

22 March – The Nottingham BelfryNottingham close to M1 J26

29 March – The Village HotelCoventry close to M6 and M40

WHAT DOES IT COVER?

We will be unlocking the Secrets To Minimising Risk and Maximising Profit in a straightforward down to earth easy to follow style using real life examples.

Here’s what your fellow Subcontractors said about our last event;

“Easily digestible information delivered in an interesting and easy to understand format”

“Very detailed and informative”

“Very informative and well delivered”

“We were struggling to get paid; not any longer!”

THE HEADLINES

  • Session 1 – Contract Formation
  • Session 2 – Introduction to JCT Contracts and Construction Act
  • Session 3 – Time, Notices and Delay and Disruption
  • Session 4 – Instructions, Variations and Maximising Return
  • Session 5 – Getting Paid On Time and the Right Amount
  • Session 6 – Resolving Conflicts and Disputes
  • Session 7 – Putting It All Together

WHO SHOULD ATTEND? This is exclusively for Specialist Contractors and is designed specifically to provide a broad appeal for Specialist Contractors staff who work with contracts which includes;

  • Estimators,
  • Contracts Managers;
  • Project Managers;
  • Commercial Managers,
  • Quantity Surveyors,
  • Credit Controllers and
  • Directors

WHAT WILL WE GET OUT OF IT? The Secrets To Minimising Risk and Maximising Profit, including the best information available to resolve the all important problem of How To Get Paid!

Specialist Contractors don’t get paid because they don’t understand the contract or don’t apply it when they should. We will reveal all you need to know to enable you to understand the fundamentals of those subcontracts, and how to get paid.

WHAT DOES IT COST? You can book now for preferential discounts and rates – but be quick to ensure you receive your Early Booking Discount!

Book within the next few days and instead of paying £350, you can pay just £315.00 saving you 10% off the standard price.

Book two or more places and you can pay just £280 each saving you 20% off the standard price.

Special rates apply for our Buddies (members) – please ask Tanya for details.

All rates are subject to VAT

Booking couldn’t be simpler, just contact Tanya directly on 01773 712116 or tanya@streetwisesubbie.com to confirm your places and she will take care of the rest. She is brilliant!

But hurry our last round of seminars sold out very quickly.

Best regards

Barry Ashmore

StreetwiseSubbie.com