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Subbies can combat contractual bullying

LETTERS Prize letter

Sir, Your editorial of February 20 highlighted a recurring weakness of this Government. It does not have the courage of its intellectual convictions.

However, your comment that 'subcontractors are powerless to recoup their cash because they rely entirely on main contractors for information on completion and signing-off of the main contract' also illuminates a recurring weakness in one of the contractual practices of many subcontractors.

Namely, their supine acceptance of contractual bullying by the client and main contractor, when told that they must accept a 'back-to-back' form of subcontract and in turn be forced to accept that their terms of payment under the subcontract are tied to events that occur under the main and/or head contracts.

As directors of many subcontractors know, 'back to back' has more than one interpretation and subcontractors are not precluded from negotiating better terms of payment that are linked to key events that take place during the performance of their scope of works.

This includes, arguing for the incorporation of backstop dates for each event that triggers phased payments, which means that at least the subcontractor will then know the date by which full payment will be made under the subcontract.

This is not as strong a position as saying 'no' to any retention, but it is arguably more realistic and, in the meantime, does support the fundamental principle of taking a bilateral approach to agreeing a subcontract.

Ultimately, perhaps the construction sector should strive to be as high-minded as this Government, by entering into as many project partnering contracts as possible. This will defuse the issue of retentions in the construction sector and thereby allow the Government to concentrate its intellectual power on calculating how much taxpayers' money is needed to continue subsidising the burgeoning defects culture in the military aerospace sector.

Mark Bull Contracts consultant Mark Bull Consulting Kenilworth, Warwickshire