Can there be a happy balance?
There have been a few interesting articles in the last week talking about the aggressive behaviour of main contractor QS’ seeking to reduce payments to sub-contractors together with articles defending the QS profession and position. They have offered some starkly opposing points of view so I turned to our own QS team to understand their take on the discussion.
For readers unfamiliar with Evolution5, we are a construction consultancy offering a range of professional services including quantity surveying, project management and construction management. Our QS team has experience on the contracting side of the fence and, we believe, offer a pretty balanced view of both sides of the debate.
It’s important to remember that, quantity surveyors, once qualified and working in ‘the real world’ will become influenced by the ‘values’ of the organisations they work for. It is a true but unpleasant fact of the business place that some companies prioritise profit and growth over ethics and morals. It will be those companies who push their quantity surveyors to take every opportunity to reduce sub-contractor payments and subsequently maximise their corporate profits, regardless of the negative impact on the supply chain.
Surely then, the first step must surely be for clients to carefully consider who they do business with. If your main contractor is squeezing their subbies to maximise their profits, what are they also doing to make more money from you?
On the flip side, when there is a shortage of good trade contractors, sub-contractors may start to believe they are in the driving seat and, consciously or not, attempt to push cost boundaries. Our QS’ have heard sub-contractors arguing, “Well, they can afford it” to defend an inflated claim for payment. Whether that is the case or not, there has to be a level of reciprocal trust in order for the contractor and sub-contractor to agree the right price for the work in question.
Turning now to matters of quality and communication, it is important for both parties to be mindful that clear, open communication coupled with good quality claims for payment will smooth the way considerably. If a sub-contractor repeatedly claims payment for additional works outside their agreed scope or for extra labour without first consulting their client (i.e. the main contractor), then they must expect to be challenged on the validity of those claims. As, indeed they should expect to be challenged if their paperwork is muddled, inaccurate or incomplete.
Ultimately though, any QS who is a member of the RICS, should be guided by their Ethical and Professional Standards. Not by a company accountant whose motivation is to swell the corporate bottom line at any cost.
It would seem a ‘no-brainer’ that eventually the worst offending main contractors will have reputations that stop people choosing to do business with them. In reality though, not only is that a long way off, but it also doesn’t help subbies in the meantime.
Without doubt, it would be more beneficial (and ethical) for main contractors to engage positively with their supply chain. To learn more about how they can achieve better cost certainty, achieve realistic profit margins AND ensure a fair deal for the supply chain. Perhaps a collaborative approach by all parties would, eventually, see an end to the so-called “vampirish behaviour”.
Tomorrow we will be looking at the benefits of Construction Management for both clients’ and sub-contractors.
