It was last week when I sent out a post about late payments in construction, contractors taking more risks, receiving poorly written project briefs et al. You can read about it here. My motivation for writing this second post so soon was after reading an article in The Construction Enquirer about anger! Yes, anger felt by sub-contractors over main contractors short listed for a new £4Bn schools framework. But why?
Prompt Payment Code
Apparently, 15 contractors have been short listed with the Education Funding Agency for work across the country. So why the anger from sub contractors? Simply put, on the one hand Government have exerted pressure on contractors to sign up to the Prompt Payment Code but still giving work to those contractors who don’t. That position leads people to think that the Government is double minded.
What is the Prompt Payment Code? The code is a Government initiative to implement three basic, yet important principles to benefit sub contractors.
1. Pay suppliers on time – With terms agreed at the outset of the contract. Without trying to change terms retrospectively. Without changing practice on length of payment for smaller companies on unreasonable grounds.
2. Give clear guidance to suppliers – providing suppliers with clear and easily accessible guidance on payment procedures. Ensuring there is a system for dealing with complaints and disputes which is communicated to suppliers. Advising them promptly if there is any reason why an invoice will not be paid to the agreed terms.
3. Encourage good practice – By requesting that lead suppliers encourage adoption of the code throughout their own supply chains.
In my opinion this is a positive step in the right direction but who will police the outworking of this code and will the Government actually make a stand in favour of the code when it comes to handing out work? Streetwise Subbie have developed a Fair Treatment Charter which you can view by clicking the link.
It is up to construction leaders to act ethically and stand firm on these commitments and not pay lip service to this charter. It is also up to political leaders not to be swayed in their commitment and ensure they keep their word.
Stand Up for what is Right!
It is my conviction that there are a growing number of sub contractors who will not work with some main contractors because of their poor payment record as well as their bullying tactics to wear the subbie down. As the marketplace becomes busier the bully will become isolated because no one will want to work with them. These sub-contractors will be the leaders to respect and look up to because they are tired of being bullied. They care about their staff and they have a business to run. They believe in hard work but also fair and just payment terms. These are the people we need to stand with don’t you think?