Dortech chairman Steve Sutherland is making the stand despite work for Balfour accounting for £5m – 40% of his turnover.
Sutherland is fed-up with constant battles over payment with Balfour and is ending his 13-year relationship with Britain’s biggest contractor.
He told the Daily Telegraph: “We’ve done 80 projects for them so this hurts us a lot. I’d love to work for them again but we just can’t take the risk.”
Sutherland claimed he has had to wait more than 200 days to get paid on some job and has had more than £100,000 “withheld” on recent projects.
Sutherland said the issue is not isolated to Balfour Beatty, but said he wanted to identify them because suppliers are often afraid of “naming and shaming” companies with poor payment practices.
He said: “They exploit their financial clout. It’s not illegal, but morally, ethically? I have my view. I don’t think elephants worry about stepping on ants.”
Sutherland also blasted the whole valuation system on contracts.
He said: “The whole process is used as an excuse to avoid paying, drive the cost of the project down and improve their cash-flow. Do they care about the unintended consequences, which is the risk of putting people out of business?
“We phoned and emailed one project director more than 30 times with no response. No one will talk to you so you keep working and investing, you get to the end of the project and they want to withhold thousands. We haven’t made a profit on any project with them for some time.”
Sutherland said pressure on project managers is causing a lot of the problems.
He said: “They’re under so much pressure to save money, they’ll do anything to save their jobs. The unintended consequence is small companies going out of business, or just not investing – we certainly can’t afford to invest.”
A spokesman for Balfour Beatty said the company “is committed to its supply chain and is at the forefront of Government and industry initiatives supporting the well-being of our suppliers”.
“Balfour Beatty has had a long standing valued relationship with Dortech, spanning many projects. The most recent contracts were completed in August with the last of these accounts agreed early in November.”