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Payment dispute forces Power One into administration

Scottish subcontractor Power One has appointed administrators after suffering cashflow issues as a result of a payment dispute with Galliford Try.  

Construction News reported earlier this month that the Paisley-based subcontractor had been embroiled in a dispute with Galliford Try Infrastructure over a £9m subcontract to replace nearly 17,000 lamp posts across Northumberland.  

At the time, Power One chairman Mark Ward warned that the dispute had put his company “under extreme financial pressure” with jobs at risk.

Official records show Power One has now called in administrators from French Duncan Restructuring after failing to resolve the payment dispute with Galliford Try.

In a statement to Construction News, Power One said: “The company entered voluntary administration on Friday morning due to non-payment by Galliford Try Infrastructure”.

The dispute arose on a contract with Northumberland County Council to replace and upgrade street lighting across the county.

Power One asked for a delay to the completion of the project in late 2016, with Galliford Try giving the subcontractor an additional 14 weeks to complete the subcontract.   

Power One, however, is believed to have claimed that Galliford Try had not supplied the necessary information to allow it to complete the works and that further time was requested to complete the subcontract.

However, both parties failed to reach an agreement. 

Adjudicator Terence Vaughan found in favour of Power One with an extension of time and an entitlement to compensation found to be due in principle to the subcontractor under its NEC3 contract. 

Despite this, Power One alleged that Galliford Try had issued two payment certificates to the subcontractor with no money against the additional time awarded, and that it has also reduced the value of works that Power One claimed it had carried out.

A Galliford Try spokesman said: “Galliford Try notes with sadness that Power One has taken the step to go into administration.

“Our policy is always to deal fairly and promptly with subcontractors, suppliers and clients.

“Payments were made to Power One through the course of the project in line with the terms of the contract, including payments made ahead of time to assist them with their ongoing cashflow issues.

“Any additional monies claimed by Power One relate to disputes over and above their contractual entitlements.”

Seperately, Galliford Try’s construction boss Bill Hocking told Construction News: “It’s not good for anyone when something like this happens. 

“I’m confident that we treated Power One fairly and reasonably in accordance with their contract. We accelerated payments to them to try to alleviate their cashflow issues. 

“We are a professional organisation and we treated our subbies sensibly and fairly.” 

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