Main Contractors - a Blessing or a Curse?
Working in construction can be a challenge can't it? Not enough staff to do the job, payments held back on a whim, pressure to get people on site and have them stand around doing nothing because the site manager has panicked and wants to look good in front of their contracts manager, bullied, pushed around and generally shown a complete lack of respect from the set of people who without you wouldn't get the job done in the first place.
The thing is that main contractors want it all their own way don't they? They've cunningly decided that they'll sub-contract out all the site labour and materials which means that they don't have to pay wages, NI Contributions, Tax, pensions (given the Carillion experience, this would be a waste of money anyway) and holiday pay to name but 5 topics. Naturally the weight of site work then falls to the poor sub-contractors, along with potentially the costs above and then initial material costs, vehicle costs the list just goes on and on doesn't. There is also another worrying trend where sub-contractors are being asked to price for work with minimal information, making estimating nearly impossible. They may also take some form of "payment" to cover CITB Levy, which is illegal by the way.
My question is why would you do that work or want to do it?
The sub-contractor has all the risk, pressure and losses and the main contractor heaves a sigh of relief and then acts as if they own the sub-contractor and their staff by acting in the manner of the first paragraph.
It's not fair is it, especially when in most cases, they (main contractor) have probably mucked up the initial estimate anyway, so the project is already running behind and they're already watching costs and are putting plans in place to "negotiate" savings with the sub-contractor, so they don't take the hit. Sound familiar?
I was with a client yesterday and we were talking about this very subject. However, their main contractor had compounded the problem by coming back after the work had been done and trying to re-negotiate the price! You couldn't make it up could you?
The fact of the matter is that (in my experience) 99% of clients I work with have the same problem, but feel they can do very little about it. After all the main contractor has all the power don't they? But do they? What would happen if:
- Sub-contractors decided not to price for jobs with main contractors who basically tried to rip them off
- Employ contract resolution experts to fight cases
- Withdraw site staff or refuse to carry out snagging until payments were agreed
I believe we would see a different industry.
However, there is a problem with this isn't there? Sub-contractors don't always have the evidence or audit trails to provide evidence of activities or discussions which plays into the hands of the main contractors, so it becomes a subjective discussion. Now. just imagine if they had! What would that mean for the discussions? How would that change the bargaining game. Contract managers are notorious for not reading e-mails. They'll send them and expect a response but how many times have you sent an e-mail and had no response to it. Imagine if sub-contractors were to follow up every discussion with an e-mail outlining their understanding of it and be able to provide all of these at the end when they're questioning the invoice. By, the way, and it is no small point, by doing this they're also questioning the sub-contractors integrity and honesty. Where would the power be then?
So, main contractors, blessing or a curse? I'll let you decide but I know where I stand...