Wise Up Wednesday – Top 10 Tips On Getting Paid!
My 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 has not been amended to make it more difficult to adjudicate if you have a problem.
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.
7) 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
9) Speak to a senior decision maker
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 an escalated
dispute later on.
I hope you enjoyed my Wise Up Wednesday blog post and that it gave you some food for thought, and I sincerely hope to speak with you soon.