The letter from Peter Whitbread (16 September) on the subject of retentions requires a response.
First, nobody is “sobbing”, but a lot of people are using valuable resources to monitor and recover significant amounts of outstanding cash that could be used for better purposes. In addition, the cash is often at risk without good reason for a period of time that any other industry would consider ridiculous.
It is not clear what role Peter has in the integrated project team but it is reasonable to ask why he and others continue to employ “subbies” – specialists! – who repeatedly fail to meet their obligation to provide defect-free work that is fit for purpose. Admittedly, Peter should not experience remedial works that are not carried out for years and years but he should only allow it to happen once.
Perhaps Peter doesn’t think there are professional specialists around who set themselves high standards and operate a defect-free policy. If so, he is wrong. They do exist and they have ways of measuring their own performance. The solution is prequalification that takes into account quality and performance as well as learning from experience – and avoiding the employment of inadequate subbies just because their price is the lowest.
This isn’t new thinking. More than 100 years ago, John Ruskin set it out with complete clarity (but with one addition of my own):
“It is unwise to pay too much but it is worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little you sometimes lose everything, because what you bought was incapable of doing the thing it was bought to do. The common laws of business prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better.”
Perhaps Peter and others who hold his views should apply this simple and obvious maxim when they next procure a construction project.
Trevor Hursthouse, chairman, Specialist Engineering Contractors’ Group