Where’s my P
Waiting and doing nothing only plays into the hands of the non-payer
40 ECA Today July 2012
aying subcontractors late is normal procedure for many main contractors. The practice is crippling subcontract businesses and sending many into insolvency. To combat late payment, subcontractors
need to invest some time in preparation, and to be patient and pursue late payment correctly. Waiting and doing nothing only plays into the hands of the non-payer. Subcontractors must prepare at the beginning of each new contract by taking the following steps:
n Establish who they are in a contract with. Often we are told that it is the main contractor but, upon further investigation, find out that it is another subcontractor above them in the supply chain. It is far better to prepare before disputes arise and know a client’s personnel and contact details. n Don’t let a BMW and flash suit give you the impression that a client can pay. Check his financial standing by using the ECA’s credit rating facility, operated by Experian, and do not proceed if a bad report is given. n Obtain a copy of the contract and make sure payment applications are submitted as and when required. Identify all the key payment dates – ie: for submitting applications; due date; payment notice; pay less notice; and final date for payment. This information is essential for enabling a subcontractor to monitor late payment. n If payment has not been received by the final date for payment, a ‘three-pronged attack’ must be implemented: 1. Submit a notice from a third party threatening further
money?
You’ve done the work, now you want to be paid – but far too often getting your money on time isn’t that simple. Ken Tracey, the ECA’s head of Commercial, Contracts and Legal, provides some advice on the best ways to encourage prompt payment – and what you can do to sort out problems
action if payment is not made within, say, seven days; 2. Issue a notice of suspension (or part suspension) of the subcontract works; and 3. Serve notice that interest will be charged.
The questions below are frequently asked by ECA members and give more details of how to implement this three- pronged attack.
It depends on what is in your contract. If a date for submitting each application is stated, or it is established by other means – for example, ‘27th of each month’ – then applications must be submitted accordingly. The contract will often state somewhere that this is a condition precedent to payment being made. This means that if the action isn’t carried out then payment is not due.
Q A
Q
I’ve been chasing a late payment for weeks and get fed up asking for it, so I threw the tools in the van and went home. Now they’ve got a new electrical contractor on site and they still haven’t paid me. What do I do now?
Although I’ve submitted an application for payment, I‘ve not been paid anything. When I chased the contractor, he said I submitted it late,
so he wasn’t going to pay till next month. They can’t do that can they?
SHUTTERSTOCK / CREPESOLES
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72