Payment Of Specialist Contractors In Construction and Engineering Contracts
Are You A Specialist Contractor With A £10k+ Payment Problem?
Specialist Contracting can be a tough business and it’s all too easy for some Contractors to find ways not to pay your interim or final accounts!
If you are a UK Specialist Contractor with a £10,000 plus payment problem you are entitled to free down to earth advice that will help you to solve your problem fast!
Our Nationwide Team have vast experience in resolving construction related payment problems and are available to help you get paid as quickly as possible.
Included in our team are Quantity Surveyors, Construction Contracts Consultants and Specialist Construction Solicitors, so we have the capability to resolve your problem fast, whether it’s £10,000 or £100’s of thousands!
So if the Contractor or the Quantity Surveyor is not paying you, or not valuing your application or variations properly or is making a set off or contra charge against you, or payment is delayed, and you want to know if you can suspend the works, walk off site, adjudicate or arbitrate then you have come to the right place!
You will be pleased to know that you can find a wealth of information on Streetwisesubbie.com about avoiding and resolving your valuation, interim, and final payment problems.
But, if your problem exceeds £10,000 and need someone to take action on your behalf right now, then don’t delay, call us on 01773 712116 or email: email@example.com for free, no-nonsense, down to earth advice!
If you are searching out of normal office hours, or haven’t got time to call right now, that’s no problem because if your outstanding payment of £10,000 or more and you need help to find a solution, then you can use the Ask Streetwise feature on this site to ask our Virtual Team of experts for help with getting paid?
If you are owed less than £10,000 and your turnover is less than £1million per annum then we strongly recommend that you view the following resources on the Citizens Advice Bureau web site. Click here now for claims less than £10,000
Late Payment Of Subcontractors and Remedies For Late or Non-payment
Life would be much simpler if you did the work, sent in your application and received your payment in full and on time!
But in reality as a Specialist SubContractor you will find that your works are not being valued properly by the QS and you are not getting paid.
You can’t write out cheques from the Contractor, but you can take positive steps to make it more likely that you will be paid the right amount of money at the right time.
For Specialist Sub-Contractors, making sure you get paid on time will mean you can manage your cash-flow, reduce your overdraft and get bigger discounts because you can pay your suppliers on time.
As a Sub-Contractor getting paid on time could mean the difference between survival and insolvency!
Please don’t delay.
Take action now and Register with StreetwiseSubbie today as a Silver Buddy and you can have access to free initial advice and a unique suite of exclusive StreetwiseSubbie Power Resources©, or be even more proactive and Become A Gold Buddy today and you get immediate free advice**, plus access to a unique service exclusively for Specialist Contractors via our Nationwide Support Network© and free professional advice that is worth more than you pay!
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How Can Sub-Contractors Get Paid On Time?
- Know the dates your payments are due and make the Contractor aware that you know
- Make sure that all applications are in on time and comply with the contract
- Contact the Contractor before the payment is due to make certain they know when you are expecting payment
- Make sure the Contractor knows that if payment is late, you will suspend your works in accordance with your contract
Can SubContractors Suspend Performance?
Suspending performance of the works is a powerful incentive to make the Contractor put you at the top of the list when it comes to making payment.
Used properly, suspension is your best solution to prevent late payment.
Suspending Your Works
Probably the biggest benefit included in the Construction Act provides that if payment is not forthcoming in accordance with the contract terms then the subcontractor may subject to proper written notice suspend work until payment has been received. When money is in short supply it is often the sub-contractor who threatens to suspend work is the one who gets paid first!
But you need to be careful and we would always recommend that you take our specific advice before suspending performance. Use the Ask Streetwise feature on this site. or call 01773 712116 or email: Info@streetwisesubbie.com, to access your free advice** about suspending the performance of your works for non payment.
Remember our team includes Specialist Quantity Surveyors and Construction Contracts Consultants, so we have the capability to resolve your problem fast. Click here now for details
Set Off and Contra Charges
If the Contractor is making a set off from your account or is deducting contra charges, there are steps you can take to resolve the situation.
First and foremost you need to take action and fast, because the situation is not going to get better of its own accord.
There is a significant difference between them saying it has cost £”x”, for whatever reason and them being able to prove that;
- a) it is your responsibility and
- b) they have actually incurred those costs
In both cases their claims, are exactly that “claims”, and the burden of proof falls on them.
In other words they have to prove that these matters are your responsibility and that any costs they say they have incurred have actually been incurred, and that they are reasonable costs reasonably incurred.
Think of it this way. How much trouble do they put you to when you claim for variations?
Pay When Paid
These clauses are intended to allow the main contractor to delay payment to his subcontractors until the money is received from the Employer and to avoid payment to the subcontractor entirely if the money isn’t received from the Employer. Since the Construction Act came into force such clauses are made “ineffective” unless non-payment is due to the insolvency of the Employer.
You therefore need to know about the financial stability of the Employer!
If payment is made late interest becomes due on the outstanding money in accordance with Late Payment of Commercial Debts (Interest) Act 1998 which applies to all contracts as from 1st November 2002. The rate of interest payable is 8% above bank minimum lending rate unless the contract itself provides a substantial remedy for late payment. The contractual rate has to be in the region of an 8% for it to be regarded as substantial remedy.
Don’t miss out – take action right now, because our low cost Monthly Subscription Gold Buddy Membership is simply an amazing package! Click here now for details
Our Top 10 Tips To Help Specialist Contractors Avoid Payment Disputes
1) Check and Understand The Contract
Always check the terms and conditions of your contract – not all contracts are the same – some are extremely onerous – do not simply hope for the best.
Make sure the 4 key elements are clearly spelt out and understood;
- Time – ensure that your programme requirements are fully and properly incorporated
- Price – have all your qualifications been incorporated, do have you agreed/understood that discount?
- Specification – check carefully that the scope and specification is what you have actually agreed to provide
- Key administrative terms make sure you understand them
When do you need to submit payment applications and in what format, when is the payment notice due and are the payment terms acceptable?
Ensure that the Adjudication Clause does not say that you will have to pay the other party’s and the Adjudicator’s costs, even if you win!
Make sure that you understand the variations or Compensation Event clauses and how these will be agreed or who is responsible for valuing them.
Check the extension of time or Compensation Events clauses, and note any time limits for issuing notices.
Ensure that you give notice, at the time, of any event which is going to hold up your progress or cause additional cost to be incurred. Take care to be clear and specific in your wording.
Manage your Client’s expectations by giving regular updates of where your final account is heading. This needs to start from day one as no-one likes a surprise bill at the end of the job.
Always get a written instruction from the person authorised to do give instructions on behalf of the Contractor/Client before carrying out any additional work. This can be in many forms, including revised or new drawings, meeting minutes or letters, but beware of e-mails as your contract may not recognise electronic communications, and if you are in any doubt get it checked out.
In all probability the contract will say that Instructions given to you verbally by the Contractor/Client are not valid. Therefore you must always confirm them back to him in writing.
4) Obtain Agreement to Additional Costs
Whenever possible, get agreement to the costs of additional works before you carry them out. Otherwise, sit down regularly with the Contractor/ Client to agree and sign-off any additional work costs.
Don’t wait until the end of the job before getting his agreement.
5) Final Account
Build-up your final account files from day one. Keep copies of all correspondence, cost information breakdowns etc, together with site records relating to each individual variation. This will save an incredible amount of time and frustration at the end of the job, should a dispute arise.
Ideally you should produce and issue a issue a detailed programme for your works and monitor it daily/weekly depending on the size and circumstances of the project.
If you are prevented from achieving the progress set out in your programme ensure that the causes of the delay are recorded and notified, and that any reasons given are those which entitle you to additional time.
This is a particularly difficult area to get right; and independent advice will undoubtedly pay dividends in protecting your interests. Our team includes planning experts who can help you with this.
7) Records, Records, Records
If Specialist Contractors want to resolve their payment problems then they need Records, Records, Records. So said a very learned Arbitrator called Max Abrahamson.
You can never keep too many records – these will be invaluable in pursuing any payment or time entitlement should the other party not agree later on.
Record when information is received, what resources are on site and what they are doing each day.
Record verbal requests for you to work in a certain way or move around the site.
Most importantly, record what is preventing you from progressing your works in an efficient manner. Get any records or daywork sheets signed promptly.
8) Take remedial action early
Don’t wait to take remedial action when things are going wrong. The sooner action is taken, the lesser the impact of the problem will be, regardless of whether the problem relates to time, quality or cost.
Most importantly, never allow an unpaid account or unpaid variations to go unresolved, as the problem is more than likely to grow rather than resolve itself.
9) Consider speaking to a senior manager or director
If discussions at site level are not addressing the problem, consider elevating the matter to a senior decision maker within your Client’s business. It is often the case that when site personnel become entrenched in their views, senior management are able to take a wider view and thus help to resolve the dispute without the need for adjudication or other proceedings.
10) Pick up the phone
A phone call to obtain appropriate expert advice at the time a problem first arises will cost nothing in comparison to the cost of resolving a dispute later on.
Free Advice For Specialist Contractors About Construction Payment Problems
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