Major contractors accused of ‘endemic late payment’

Grant Prior 3 weeks ago
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Trade contractors have been highlighting “endemic” payment abuse among some tier one firms following a recent spate of specialist collapses.

Companies have been contacting the Enquirer to complain about ongoing payment dispute and delaying tactics used by some main contractors.

One leading specialist trade body said: “Our members feel that payment abuse is endemic with certain tier one contractors.

“Specialists are funding work undertaken for nearly six months when you add up all the tricks and turns the tier ones use.

“Rather than 60 days payment, six months free credit and unauthorised overdraft paints a truer picture of the construction industry in some sectors.”

Specialists have also highlighted the growing use of Pay Less Notices, contra-charges and contract amendments.

One steel specialist said: “Often if we apply for erection being 80% complete it is common that the main contractor values it at 70% with little to no science behind it, just because they can.

“We then have the option to either argue the case with them to get a more reasonable notice, which would have slowed the payment down, or just accept their assessment in the hope that the money will be received on time.”

A high turnover of quantity surveyors at main contractors was also flagged as a problem.

One subcontractor said: “Across two projects we have dealt with over ten different QSs.

“The new person coming in had to get up to speed and this created delays.

“QSs were leaving because they were not comfortable with the way they were being told to operate by finance departments at head office.”

 

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