Lens Blog: Getting paid

Lens Blog: Getting paid

The second in our series of short blogs by FIS 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 our focus on collective experience. 

My phone is ringing a lot just now with clients saying – “we need help as we are not getting paid.” Is that going to improve, and I would say no in the current market conditions. What business in the construction industry need to do is to become much more focused, and commercially smarter in dealing with the financial aspects of their projects.

So here are a few suggestions…

 

Members can see the full blog

Outstanding area of concern not resolved by the UK-EU Trade and Cooperation Agreement

Outstanding area of concern not resolved by the UK-EU Trade and Cooperation Agreement

The CPA Techincal and Regulatory team have updated the latest paper regarding areas of concern on the UK-EU Trade and Cooperation Agreement. This is set as a result of the post-Brexit UK-EU Trade Deal, particularly around the transition from CE Marking to CA Marking. To read more on the subject, you can access the paper here.

FIS CEO Iain McIlwee stated:

This is worrying long list given the time available.  We need to be having conversations with the supply chain and checking our contracts to ensure that we are not going to get landed with liquidated damages because availability of a product or component becomes an issue.  We continue to ask members to come forward with any specific problems that they face and to work with the CPA, CLC, Civil Service and our political masters to ensure that we don’t leave construction in the lurch because of practical problems resulting from political indecision and resource”.

Lens Blog: Getting paid

Lens Blog: Site Instructions and Variations

This is the first in a series of short blogs by FIS 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 our focus on collective experience. 

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 sub-contact 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 wont 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.”……

 

Members can see the full blog

Changes to the Building Regulatons – Aligning with the Building Safety Act

Changes to the Building Regulatons – Aligning with the Building Safety Act

The Building Safety Act marks a wholesale change to the way the building process and demonstration and enforcement of compliance associated with buildings deemed higher risk (see consultation, now closed, on the definition of higher risk buildings) will be managed.

The Act provides a framework for change and Government is now consulting on how elements of wider regulation need to change and principles set down within the Act that will be brought through in secondary legislation.

A portal is now open looking at policy proposals for legislation government intend to introduce to create the building control procedure for higher-risk buildings, as well as wider changes proposed to improve the building control system overall.

They are seeking now views on:

  • New duty holder and competence requirements on all building work and additional duties for those working on higher-risk buildings. These new roles and requirements aim to ensure a stronger focus on compliance with the regulations
  • A series of robust hard stops (“gateway points”) to strengthen regulatory oversight before a higher-risk building is occupied
  • The approach to Regulator’s notices to support building projects which comprise both higher-risk building work and non-higher risk building work
  • Stronger change control during the construction of higher-risk buildings
  • Additional requirements for building work carried out in existing higher-risk building work e.g. refurbishments
  • The process of certifying building work that have been carried out without building regulations approval (regularisation)
  • Establishing greater record keeping and management in higher-risk buildings (golden thread of information – and a key consideration as to how accoutability and responsibility are managed)
  • A mandatory occurrence reporting system in higher-risk buildings
  • Wider changes to the building regulations to help align the existing system with the new system
  • More rigorous enforcement powers for building work in all buildings to focus incentives on the creation of reliably safe buildings from the outset and the approach taken to the review and appeal of building control decisions
  • The transitional provisions for changing to the new higher-risk building regime

The impact on the wider Building Regulations and Building Control Process

As part of this work there is a focus on aligning changes and requirements of higher risk buildings with wider changes to the building regulations – this is consistent with concerns raised through the development of the Act that highlighted concerns over the complexity of a two tier system of Buildinig Control and that Building Control Authorities will now be regulated through the HSE.

Aspects of this includes recommendation of a more onerous application that, instead of depositing full plans, applicants intending to carry out building work on a building that is not a higher-risk building will need to submit a building control approval application with full plans to the local authority prior to commencing building work. The building control approval application will be required to demonstrate how the proposed building work complies with all applicable building regulations’ requirements.   It is likely to lead to greater detailing requirements related to functional requirements of the regulations.

It is also notable that demonstration of competence requirements and demonstration of competence will be under closer scrutiny through the new process for all aspects of the Building Regulations and more consistet with the concepts of accountabilty and dutyholders outlined in the Act as well as a press for greater collaboration, with the inclusion of statements such as:

We propose that the following duties will apply to all dutyholders during design and construction, they must:

  • Plan, manage and monitor their work to ensure the building work complies with building regulations;
  • Cooperate with other dutyholders (e.g. share information, have effective routes of communication, and support other dutyholders in achieving compliance with the regulatory requirements imposed by the new regime for higher-risk buildings, including meeting gateway two and three, golden thread and mandatory occurrence reporting requirements); and
  • Ensure they and the people they appoint are competent (have the necessary skills, knowledge, experience and behaviours and where organisations are involved, the appropriate organisational capability) to carry out design work and building work they are engaged to do and only undertake work within the limits of that competence.

These dutyholders will be aligned to the those in the Construction (Design and Management) Regulations 2015 (CDM).

There are also some interesting aspects related to the Golden Thread that may be complex to manage in the context of start/stop Gateways:

It is expected that the design and construction phases will overlap and influence each other, rather than run consecutively. The Principal Designer should be responsible for updating and managing the golden thread during the design phase. We propose that they will be specifically responsible for:

  • Creating and developing the golden thread (although initial information about the building may be provided by the client) and managing and updating this throughout the design phase;
  • Finalising the golden thread and handing it over to the Principal Contractor on completion of the design phase;
  • Collaborating with the Principal Contractor to ensure any design work done during the construction phase is captured in the golden thread;
  • Ensuring that the golden thread meets the required standards/principles; and,
  • Cooperating and sharing information with the Principal Contractor as necessary.

Associated charges for the Building Control Process also form part of this consultation.

 A New In Occupation Regime

Consultation is also taking place on concerning the in-occupation regime for occupied higher-risk buildings, whilst most of this is not on the surface directly relevant to the construction process and FIS members, it does include some important information related to O&M Manuals and the requirements of the Golden Thread.   The CPA has prepared an excellent summary that FIS Members Can Download here

Next Steps

The consultation deadline is the 12th October.

Full details of the consultation are available here – please consider responding directly, but also sending any specific comments through to FIS on iainmcilwee@thefis.org.uk that we can build in to any required sectoral response.

Aspects of this consultation will be discussed at the upcoming FIS Working Group Meetings – see details of times and locations here.  The FIS will be feeding in our views and working closely directly with the Department and with Construction Products Association and the Construction Leadershp Council to ensue that the industry is seeking concesnus and is aligned and collaborating when we focus on compliance.

FIS strengthens contractual support in troubling times

FIS strengthens contractual support in troubling times

In the last few weeks FIS has seen an increase in requests from members related to contractual matters, some that are reaching a critical point.

The range of requests for support have included delayed payments, price fluctuations and misalignment in pricing of variation as well as concerns over design liability and transfer through contracts.  As inflation and delays continue to erode margin, such issues are seem set to become more commonplace – whilst the industry talks about transformation, there is a danger we are becoming more contractual.

To support members in a challenging time, FIS is delighted to announce a new consultancy arrangement with Bunton Consulting Partnership.  This partnership will enable FIS to extend support for members experiencing commercial and contractual issues, by referring them to a highly experienced Industry Consultant, Len Bunton FRICS FCIArb Hon FRIAS (further details below).  Len will provide an initial free consultation of 1 hour to discuss and review the specific issues faced 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.

Commenting on the introduction of this new service, FIS CEO Iain McIlwee stated:

“This partnership further strengthens the support FIS provides to its members in managing contractual concerns.  Sadly we still operate a contractual structure that often encourages adversarial behaviours – we even call ourselves contractors rather than constructors and the result is we spend as a sector 1.9% of turnover, almost double that of any other industry, on legal disputes.  The cost to the bottom line is crazy, the cost to lives and wellbeing morally reprehensible.  At FIS we are focussing on procurement as a key lever for change, but we are very conscious we are where we are and it has never been more important for members to review their contractual positions and make sure they understand and can quantify risks.  We have seen an uptick in administrations in recent months and there is a fear that the industry is entering survival mode.  This is when we are tempted to resort to the worst possible behaviours.  We are grateful to Len for stepping up to provide additional help in these challenging times – his work on the Conflict Avoidance Pledge and advocating this approach makes him a perfect partner for FIS.”

As part of the new relationship Len Bunton made the following comment:

“I have dedicated my career to conflict avoidance and this for me starts before the contract is even signed – it is all about getting off on the right foot.  You need to enter contracts with your eyes open to the risks and reinforce to everyone involved in the project that paperwork is everything and that any instruction must be documented and confirmed in writing at the time.

The clearer the information, the less ambiguity which means less scope for misunderstanding and reduced opportunity to debate and delay.  It is also critical to make sure all are aware of contractual deadlines and any how any deviation from programme or variation in price needs to be reported.  Doing all of this won’t guarantee the avoidance of all disputes, but they will see many off before they start and allow for speedier resolution and ensure that you are in the best possible position should you need to rely on third party intervention. I am looking forward to working with FIS Members to resolve existing issues, but also offer the advice and support that will help them avoid the next one too.”

With Len, FIS is actively encouraging members and the wider construction community to look at Conflict Avoidance Pledge (CAP), based on the simple concept – the cheapest way to manage any dispute is not to have it at all.  The CAP is a contractual mechanism, which helps parties to avoid getting embroiled in pro-longed and damaging disputes. Where disagreements begin to develop, CAP enables parties to address and resolve matters early, collaboratively and inexpensively.  The process recommends standard clauses that you can include in your contract.

Further information about Bunton Consulting Partnership is available below:

Len Bunton FRICS FCIArb Hon  FRIAS – has over 40 years’ experience as a cost consultant and, adjudicator, arbitrator, mediator, expert witness and conflict avoidance consultant. He has extensive experience on major projects.  Len is Vice Chair of the Conflict Avoidance Process Coalition and is absolutely committed to the Conflict Avoidance Process.

Bunton Consulting Partnership, 2 Ardoch Way, BRACO, Perthshire, FK15 9RH | Also at Princes Exchange, Princes Square, LEEDS, LS1 4HY | E: len@buntonconsulting.co.uk

 

This service compliments the existing FIS Legal and Helpline and Contractual Support and can be accessed by calling the FIS office on 0121 707 0077.

 

For the full range of supporting advice and information available to members you can visit the FIS Contractual Commercial and Legal Toolkit here.

 

Tickets are now on sale for Training Awards Lunch

Tickets are now on sale for Training Awards Lunch

The awards are a joint event between the Worshipful Company of Plaisterers and FIS to recognise achievement and excellence in plastering and interior trades. The event will be held at Plaisterers’ Hall on 22 November and will celebrate the achievements of students and apprentices in our sector, as well as organisations and individuals that champion skills and training for the benefit of our industry. It will also provide networking occasion for like-minded individuals to come together. You can book your seats here.

If you haven’t yet entered the awards, there’s still time to nominate. The awards recognise:

  • The achievement of apprentices
  • Students who have exceeded beyond expectations
  • The delivery of training by colleges and training providers
  • Training delivery by an FIS member company
  • Mentors and others who have supported sector training
  • Lifetime contribution to sector training

If there is an indivdual or business you’d like to nominate, you can find out more details on how to enter here.