There is nothing worse for sub-contractors than doing work on site and not getting paid for it. So how does that come about, and what can you do about it. The first thing FIS members need to do is to read the terms of the subcontact you are offered, to identify any high-risk issues. If you are too busy, then there are plenty of experienced folks out there who can do it for you. Once potential problem clauses are identified, then you can raise these with the employer/contractor and try to negotiate these out. What happens if they won’t budge, well I tell my clients jut to walk away, its not worth signing up to something that could put you out of business.

One area I want to focus on relates to site instructions and variations. A FIS member sent me a sub-contract recently where it states that you don’t carry out variations without a written variation instruction from the contractor, then they won’t be accepted, and if you do carry out the work then you won’t be paid. Now on many may occasions, you are working away, and the site manger says, “will you take down that ceiling and reboard it please as its been damaged by other trades.”

So, what do you do? Ask for an SI in writing from the site manager. If you get that, then email the SI to the contractors QS and ask for a variation in writing. If you can put a price on the variation, then even better. If the site manger bawls at you for not getting on with the work, then tell him the problem is at his end as your subcontract says a variation must be in writing, from the contractor. What happens if you don’t get a written variation, then I advise my clients not to do the work. Now I know some FIS members reading this will be saying” Len, life is not like that”. I accept that but, in my experience, if you take a firm line from the outset, then the contractor will get the message.

I attended a pre-start meeting recently with a client, and one of the issues we discussed and agreed was that my clients would not carry out additional works without a written variation, and as far as possible the costs would be agreed in advance. That suited the contractor as he then could confirm the costs to the clients QS.

What happens if you can’t put a price on the work? At this stage of the job, you should have made the contractor aware of your hourly rates and mark ups on materials and plant. Keep a careful record of the number of operatives and the hours worked. Provide material quotations and/or invoices. Send this all to the contractors QS and ask him if he needs anything more from you.

One final point – when you submit your applications for payment then record the variations that “Are agreed”. Quite often the personnel in a contractors business move on and a fresh pair of eyes comes 2 in and they want to review everything payment wise, and they start to disagree everything if its agreed, then its agreed.

I deal with cash flow and payment problems every day. I am convinced that with more efficient commercial management then subcontractors can avoid many nonpayment problems. Producing a good quality project for your customers, on time, is very important but payment is about profitably and survival.

RICS has created a LinkedIn Group which focuses on bringing together likeminded professionals who recognise the benefits of working collaboratively to avoid conflict and manage disputes at an early stage.

This group was established by a pan-industry coalition of leading construction organisations – the Conflict Avoidance Coalition – whose ambition is to reduce the financial and other costs of disputes within the industry to try and help deliver infrastructure and property development projects on time and on budget. One of the steps taken by the coalition to achieve this aim is to encourage organisations across the supply chain to sign the Conflict Avoidance Pledge to signify commitment to the principles of working collaboratively to avoid and manage disputes efficiently and effectively. You are invited to join the group and participate in discussions.

FIS publishes short blogs by its Consultant Len Bunton on contractual and commercial issues he experiences when supporting FIS members and the wider community – it is designed to help FIS Members avoid common traps and build on the FIS focus on collective experience. The blogs are published fortnightly as FIS member only content and released to SpecFinish two weeks after publication.

Len provides an initial free one hour consultation to FIS members to discuss and review specific issues and to help develop a strategy to address. Should further advice and support be necessary, thereafter then Len will agree the necessary fee levels with each FIS member.

You can find out more about FIS membership here.