Subcontractor Payment – The Battle of the Forms

21 years ago I was writing my dissertation in Bristol as part of my Quantity Surveying degree course. The topic I chose to research was ‘Problems in Subcontractor Payment’ and despite my college Professor’s reluctance to accept it was a problem, I chose to ignore his advice and submitted my analysis of the situation at that time and my proposed solutions.This set me on a path that has seen me ignore the traditional PQS and Contractor’s QS role and I have only ever worked for Specialist Subcontractors.

Back in the early 90s contractual abuse was common place and subcontractor payment was often abused. Main Contractors would enforce Pay when Paid clauses as a matter of course and subcontracts were extremely one sided and onerous. I cut my teeth working on the boom of motorway widening and ‘lane rental’ projects that burst on to the scene around the M25 in the early 90s and drew many a red line through the badly drafted subcontracts of the notorious Civil Engineering Contractors of the time, such as Balfour Beatty, Costain, Tarmac, Amey etc

What I learnt during that period was that the most important meeting on any construction project is not the final account meeting, it is the pre-let and the most important battle is not the price, but the ‘battle of the forms’. If you can get a standard form with fair terms and conditions, then you stand a decent chance of protecting subcontractor payment and completing the project with a small profit and your reputation intact. The alternative will lead to ruin.

The commercial environment is more favourable these days post Latham Report and with the Construction Act in place, but Contractors and their Quantity Surveyors are geared up today as much as ever to take advantage of every opportunity to tip the balance in their favour, which is why they still issue non-standard forms, with  their own re-drafted clauses, particularly in respect to subcontractor payment, adjudication and notifications.

That is why as specialist subcontractors, in this economy with ever dwindling margins it is as important now as it ever has been to make sure you fully understand the contract that you are signing up to when agreeing subcontracts and subcontractor payment terms. Protect your rights, your cash flow and win the battle of the forms.

1 thought on “Subcontractor Payment – The Battle of the Forms

  1. I agree that the battle of the forms is still as true today as in the past but I also think that properly organised sub-contractors can still find themselves caught out by the tactics of the main contractors even when the initial battle has been won. The age-old tactic of removing all the site staff who dealt with the job on completion and drafting in a senior QS who had nothing to do with the job is a common stalling method. Spurious claims for damage to others work are still evident when the mc has to recover something from the supply chain in order to reduce their losses on a job. After almost 40 years of contracting I still get caught from time to time by these tactics and can never relax. Good standard contract docs and a constant vigil during the works are essential.

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