ACR-News
3 October 2012

96% of subbies "unfairly treated" by main contractors

UK: A survey of specialist sub-contractors operating in the UK has shown a high level of dissatisfaction with main contractors, with 96% saying they are being treated unfairly.
The survey, conducted by StreetwiseSubbie amongst 278 businesses from a wide range of sectors, provides a bleak snapshot of the current state of the construction industry.

According to StreetwiseSubbie founder Barry Ashmore, 'The survey recognises that there are a handful of main contractors who are good to work with but the majority are destroying the industry's infrastructure by underpaying subbies and paying them late if at all.'

The survey bears this out: 89% of respondents reported incidences of payments being delayed and 65% being paid less than agreed over the last 12 months.

'The whole construction industry is at breaking point,' said Barry Ashmore. 'I have been in the industry for 40 plus years and have come through previous recessions, but never have I seen the industry in as dire state as it is today. It has always been tough for specialist sub-contractors, but the way specialist contractors are being treated today is an absolute disgrace.'

He believes the problem lies in the hands of the main contracting companies 'who have plumbed new depths of corporate greed.'

He alleges that the main contractors are expecting, as a matter of routine, to underpay or withhold money from those lower down the food chain.

'Specialist sub-contractors are given ludicrous excuses for non-payment. And the contractors think it is an acceptable way to do business,' he said.

'I believe that this unacceptable behaviour is being driven from the top, as contractor's main board directors demand profits from their commercial directors and managers, who in turn put pressure on the QS's to deliver results. The contractor's site teams are under -pressure and are forced to withhold money from the sub-contractors to cover up for their own mistakes.

'And the only people who suffer are the sub-contractors, because they are left out of pocket. The fact that 90% of sub-contractors lost between £20,000 and £100,000 to main contractors over the last year just shows this in action.

'5,500 construction related firms went out of business in the last two-and-a-half years, and the majority of those were specialist sub-contractors. But main contractors still managed to make profits during the same period. Tell me how that is right, or fair,' says Barry.

When asked about sub-contractors making inflated claims for variations and delays, Barry was quick to stand up for the industry, saying 'In last 22 years I have worked as a consultant on behalf of many specialist contractors, and in my experience the vast majority are only looking to recover what they are legitimately entitled to, and to make a reasonable profit.'

Other findings of the survey include:
71.8% had variation accounts not agreed or under valued
56.1% saw charges to changes of work disputed.
54.5% said they were subjected to spurious contra charges or set offs
48.2% had to enter into unfair / one sided contract terms
43.5% were subjected to unfair tender practices
42% experienced unnecessary restrictions, paperwork or administration
41.2% experienced demands to reduce costs after terms agreed
40.4% had unreasonable contractual risks passed down
20.8% were subjected to lower standards of health and safety

Further details and a copy of the survey from www.streetwisesubbie.com

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