Cooper & Hall Director Graham Hall mourns the passing of trust and transparency in the construction industry
At the ripe old age of 65, I should be retiring. After all, this used to be the statutory retirement age, although it is not likely to happen for me just yet. Over 30 years ago I failed in business, putting my family on the street and selling my car just to eat. The ‘cash only’ and ‘no loans’ recovery process was slow and often tedious, but not impossible. In fact, this established the ethos with which Phil Cooper and I formed a partnership some 16 years ago and it is on this basis that our growing incorporated consultancy commits to looking after our clients’ money and contractual interests as if they were our own.
How things have changed since I started work in the construction industry after leaving school in 1971. While I was still an aspiring young quantity surveyor, along came metrication – both measurement and money. Then paper, pen, scale rules and comptometers were changed for computers, tablets and iPhones. Drawings, specifications and Bills of Quantities produced by hand, along with handwritten and typed letters by post, have almost been completely replaced with the advent of the internet and cloud-based information for transferring and sharing electronic processing – the so-called electronic information superhighway.
Trading relationships have also changed, particularly in relation to the allocation of risk and payment between employers and the contracting supply chain.
Early in my career, employers paid full fees to architects, structural and M&E consultants, who mainly fully designed schemes. These were procured and managed through a standard, unamended form of contract with detailed measured and priced Bills of Quantities both in and to reasonable timescales. Payments were processed and made promptly and regularly on an interim basis, with little, if any, adjustment or disagreement. Generally, any real adjustment was made in the Final Account, often at a meeting, and sealed with a handshake. Main contractors both trained and employed craft operatives to carry out the bulk of the work, and only employed subcontractors when specialised skills were called for.
Today, employers insist upon cut-price fees for consultants, who produce schematic designs at best and sufficient only to obtain Planning Consent. Procurement of the works is then generally on a lowest price basis, with the main contractors aggressively competing to complete the overall design and manage the construction work only. The successful contractor then employs numerous subcontractors to carry out all the design and installation of their respective works on site. Consequently, all parties have become extremely risk averse, giving rise to constant interruptions to an incomplete and developing information flow, resulting in delayed off- and on-site programmes, and frustrated operation of the interim payment mechanisms, which the Government has sought to remedy via legislation, although unsuccessfully to date in my opinion. There are now constant differences and disputes relating to the level and timing of payment, both on an interim basis and nearly always at Final Account stage. Seldom settled with a handshake.
Unfortunately, the transparency and trust that existed in professional construction procurement processes have all but been abandoned. What might have been minor gaps in carefully considered and prepared design and specifications in a timely manner, ‘when I was a lad’, are now often fundamentally flawed and misrepresentations of what an employer and/or main contractor really wishes to procure through the so-called electronic information superhighway. This results in immense shortcomings, electronically accelerated in time, creating a very adversarial commercial and perverse contractual climate for undertaking construction contracts.
Whatever happened to the ‘fair day’s pay for a fair day’s work’ that existed when I first started work, even if it was at a ‘flat rate’!
If anyone needs assistance in both calculating and collecting their fair day’s pay, then please do not hesitate to make contact.