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News & Blog

 

 

 

PQQs - Money Making Scam?

Published 21st April 2017 

Is it not time that the Pre – Qualification money making scam is ended?

Not only do specialist contractors have to deal with late payments, reduced margins and not getting fully paid, they are forced to participate in a pre-qualification process which is incredibly time consuming, exorbitantly costly and completely unnecessary. The process thrives on duplication and is required by Main Contractors to keep specialist contractors on their Approved Contractor lists. So, why don’t Main Contractors get together and develop forms/processes that are acceptable to all? Sounds simple, well yes, it is, if there was a will to do it. Of course, the more intuitive question would be, will Main Contractors willingly cease this money-making enterprise? And the predictable answer is, no they won’t!

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Specialist Contractors hit by £1.9 billion bad debt provision per year!

Construction Charter - Still a Massive Flop!

Published 10th February 2017

We at the Confederation read with interest the recent government white paper; ‘Fixing our broken housing market’. Leaving aside the indirect admission that government housing policy has failed over many decades, we noted the reference to the ‘Farmer Review’ (P. 41), “This is an important moment and we should make the most of the opportunity for industry to invest in its workforce, alongside tackling the issues raised by the Farmer Review. The larger companies need to take responsibility for ensuring that they have a sustainable supply chain, working with contractors to address skills requirements”. Well yes, we agree! The Farmer Review highlighted how specialist contractors are unfairly treated whilst working as part of a supply chain:

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Main Contractors Reduce Payments to Subcontractors - No Surprise There!

Published 21st January 2017

Referring to the Construction Enquirer article ‘Subbies under attack from new breed of aggressive QS’ (20/01/2017) it states, “Subbies are coming under pressure on site from a new breed of “super aggressive” quantity surveyors employed by main contractors...it’s pretty depressing at the moment. There’s certainly a new breed of younger QS who are drilled by the main contractors to get back what they can". However, to be fair to Main Contractors, this is not new, they have always been very successful at reducing payments to subcontractors. They rely on the fact that many subcontractors do not fully understand the implications of the contracts that they sign.

Main Contractors very effectively exploit subcontractor liabilities. However, contracts are not just one way. Subcontractors should use them to receive fair payment. Starting at the beginning, Subcontractors should refuse to accept spurious clauses in contracts which have been added by the main contractor.

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Subcontractors - Late Payments: Still Biggest Threat!

Published 7th December 2016

It is pleasing to note that “large companies will be required to publish details on how quickly they pay their suppliers, under draft regulations released by Small Business Minister Margot James” (Construction Enquirer 6/12/2016). Although a year later than originally promised, it is still pleasing nonetheless. We must wait to see if payment practices improve because of these regulations. However, we at the Confederation of Construction Specialists are sceptical and not convinced. The onus is on the main contractor to improve bad practice because they must report twice yearly on their payment practices under the ‘Duty to Report Rule’. However, main contractors already know of the hardship they cause and being deterred because they should report it does not seem like a deterrent at all.

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We are really pleased to announce that the Confederation has been recognised for its Support Services and has been awarded: -

Best Construction Sector Contracting & Financing Advisory - United Kingdom Award for Excellence in Support Services by BUILD Magazine.

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Farmer Review - Recognises Unfair Payment Practices for Specialist Contractors!

Published 17 October 2016

The well-received Farmer Review of the UK Construction Labour Model, has identified many unjust payment practices that specialist contractors are unfairly subjected to and must contend with whilst contracting as part of a supply chain:

  • "...multiple on-costing, downward and often inappropriate risk transfer" (p.17)
  • "...Clients tend to fixate on lowest initial tendered price and this is often perpetuated by their advisors, who, in a traditional procurement model, are implicitly employed (at least partly) to manage a fixed and adversarial transactional interface between clients and industry" (p.24)
  • "...The multiple and tiered sub-contracting interfaces within the industry and between industry and its clients has generated a further non-value add process whereby some businesses higher up the supply chain will use other businesses’ money lower down to temporarily support and enhance their own cash flow." (p. 24). I guess this may be the answer to why the Robertson Group are predicting the rebalancing of margins if project bank accounts become commonplace:

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Specialist Contractors Need Lower Thresholds on Project Bank Accounts!

Published 8 October 2016

It has been widely reported that the Scottish Government, on public work projects, to protect subcontractors from insolvency and payment abuse, is introducing Project Bank Accounts. Clearly this is a step in the right direction. However, it does not go nearly far enough to protect Specialist Contractors from payment abuse.

Project Bank Accounts will be a requirement from October 31 on building projects over £4m and civil engineering projects over £10m in Scotland. However, we at the Confederation of Construction Specialists believe these thresholds are far too high and do little to protect the most financially vulnerable members of a Main Contractor’s supply chain. It is obvious to us that there should be Project Bank Accounts operating on all projects (Government and Private) with a project value in excess of £1m.

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Fair Payment Terms for Specialist Contractors!

Published 21 September 2016

Referring to the Dunne Group collapse, SNP MP Martyn Day, according to the Construction Enquirer, has asked for a “… ministerial statement or debate in Government time on what steps the Government is taking to ensure better payment standards for contractors”. Well, we at the Confederation of Construction Specialists can think of a few steps that should be immediately taken to ensure better payment standards for specialist contractors:

  • Automatic compensation (at a punitive rate) for any late payment receipt (beyond agreed terms).

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