General Construction 608 views Oct 19, 2018
It is Time to Recognise the Worth of Specialist Contractors

As specialist contractors carry out the vast majority of construction work in the UK, isn’t it about time the construction industry acknowledged their role writes Gerald Kelly.  Specialist contractors and suppliers will together produce the bulk of the detailed design work and will manufacture, fabricate, supply, install, commission and maintain the components which make up the finished building or structure. 

However, this is conveniently forgotten when Main Contractors deal with the Client. The Main Contract Agreement between the Client and Main Contractor is considered as the most significant contract, even though the expertise of specialist contractors is indispensable. Specialist contractors invariably end up having no direct contractual link to the client, operating as sub-contractors to the Main Contractor and having to deal with Main Contractors unloading risk down through the supply chain.

So, why is there a reluctance to acknowledge the functions of specialist contractors and suppliers? Could it be that it is far easier to abuse contractual positions if specialist contractors are relegated to being functional accessories to the Main Contractor rather than being recognised for the crucial role that they perform.

Of course, Main Contractors will argue that their supply chain is extremely important and are recognised and rewarded for the expertise they bring to construction projects. However, if this were the case, why do Main Contractors alter standard forms of subcontract, insist on onerous Terms and Conditions and participate in late payment practices. A quick look at data compiled by Build UK on their members’ payment performance, using data published under the Duty to Report on Payment Practices and Performance, highlights the appalling late payment practices of many Main Contractors.

Company Name          % of invoices NOT paid within agreed terms   Average time taken to pay invoices (days)

Clugston                                             13                                                 32

Willmott Dixon                                   8                                                   33

Canary Wharf Contractors                 8                                                   34

VolkerWessels                                  19                                                   35

Bouygues                                          31                                                   40

AECOM                                              52                                                   40

Skanska                                            11                                                   41

ISG                                                    48                                                  42

Multiplex                                           47                                                  43

Seddon                                               7                                                   44

Morgan Sindall                                 24                                                  44

Wates                                               62                                                  44

Mace                                                 43                                                  45

BAM Construct                                 49                                                  45

Keltbray                                           11                                                  47

Galliford Try                                    26                                                  47

Sir Robert McAlpine                        70                                                  49

Interserve                                       83                                                  50

William Hare                                   29                                                  51

Vinci                                                36                                                  52

John Sisk & Son                              64                                                  52

Kier                                                  48                                                  54

Balfour Beatty                                 54                                                  54

Engie                                                 1                                                   61

Murphy Group                                 66                                                   66

The Guidance to reporting on payment practices and performance specifies that the average time taken to pay should be measured from the date of receipt of invoice to the date the supplier receives payment. For construction contracts in scope of the Housing Grants, Construction and Regeneration Act 1996, businesses must use the earliest point at which they have notice of an amount for payment, which would generally be the date they receive an application for payment.

It truly is the time for the construction industry to move forward. A good start would be to recognise the worth of specialist contractors, issue fair contracts, pay on time and stop all detrimental payment practices.

The construction industry has many problems; however, they can be solved if all work together and put aside the adversarial attitude that is prevalent within the industry.

Gerald Kelly is General Manager of the Confederation of Construction Specialists, an organisation which fights for fair and ethical contracts within the construction industry.