‘We’ve had enough. Sort yourselves out or we’ll stop working for you.’ A specialist tells main contractors what to do next

There is a line in End of Days delivered by Gabriel Byrne’s character (the devil) to Robin Tunney’s character (Christine): “You think I came here to hurt you? I didn’t come here to hurt you. I came here to love you. Give yourself to me.”

For those of you unfamiliar with the 1999 Schwarzenegger film, Byrne’s character is trying to seduce Tunney’s with the intention of creating the antichrist. Hard to read as it may be, this feels like a parallel of the relationship between main contractors and specialists and – let me be candid – we have been feeling like Christine for the past few years. 

Has that got your attention? The days of main contractors being able to metaphorically seduce specialists are over. That’s right – it’s enough. We’ve been talking about how to “do things better” in the industry for years, and it hasn’t changed.

The time for talking at the Department for Business and Trade, the Construction Leadership Council workshops, endless Zoom calls about “collaboration” etc, it needs to stop. But it’s not too late! You, the main contractors, can prevent a catastrophic financial failure of the industry.

We are already at the bottom, as can be seen in cruel black and white by the failures of large main contractors throughout 2023

Where to start? How about that oft-trotted-out line, “the race to the bottom”. No, there isn’t a race. The race is over. All the hurdles have been flattened by various clumsy athletes and the bunting has been taken down.

We are already at the bottom, as can be seen in cruel black and white by the failures of large main contractors throughout 2023.

There is fundamental rot at the core of how construction is procured, and it begins with the client, and with you. It is your job as the main contractor to really work with your client, not to simply say yes to everything to win a job at a 2% margin (or lower), with all the supply chain pain it then brings.

You must educate your client and you must challenge their wishes, and find better ways of fulfilling what they want, in a way that works for the chain, not simply release that blazing fireball from your estimator’s trebuchet towards the specialists.

What are the client’s pain points? Yes, it tends to be time and money but there are so many other things to discuss which you may need to discuss with us too, before you send a tender package.

Help us out by listening to us when we flag potential issues so that we can collectively resolve with the client

Take us with you to see your client; we can help you win the job. We can talk about the nuances of our trade and what may hold us up on the project, or specific issues to do with materials availability, imminent price rises, market capacity etc.

We can do this because we are specialists in our field; it is our job to know, and we do know. Help us out by listening to us when we flag potential issues so that we can collectively resolve with the client – it will bring us closer and improve day-to-day working relationships. Oh and what?! It’ll make everyone more money!

“You must provide a 25-year insurance-backed guarantee on the works,” says the client. “Ok no problem,” you say. Your estimators send out the job to the specialist supply chain and that is a condition on our tender being “valid”. But the problem is, a 25-year IBG does not exist.

We tell you this and we offer other options, from the maximum 10 years’ IBG to specific manufacturer warranties of 20 years-plus, be they single point with consequential loss cover etc. But no, you come back and say, “you must provide a 25-year IBG”.

We lose interest because we genuinely want to help and to do a great job. We want to help you, but you don’t want to listen. We want to help you to help your client. We want to deliver an amazing job, to time and to budget, and we want to provide our expertise. You, though, must manage your client’s expectations, because we now want to know that is happening.

>> Also read: Are you fragile or agile? That is the question for contractors

>> Also read: Industry should look in the mirror: Laing O’Rourke’s losses do no one any good

>> Also read: Firms going bust, millions lost and all for a next-to-nothing margin: Who in their right mind would want to be a contractor?

Specialist installers are just that: installers. Why is it then that you start your tender letter with the line. “you must take full design liability”?

You have two choices here. Either let us actually do the design from the start in conjunction with a manufacturer (ie our spec), or accept that we are there to install to another’s design.

If you have entered into a design and build contract, then that is for you to manage; it’s for you to “D” and us to “B”; it’s what we’re set up to do. Your architect carries the relevant PI insurance to design – that is why he’s spent seven years qualifying, because of the metaphorical weight and actual potential liability on his shoulders for that design.

We are well insured of course to do our bit, but seriously don’t expect us to take liability for something we didn’t do or influence. It’s akin to you telling us to take responsibility for birth control when we are not in the room during the coupling.

If you send tender packages to us without conversation and expect us to return without being open to a discussion on risk, then we are going to jack up the price – why would we not? We need to protect ourselves if you are going to push all risks downstream to us.

If you don’t start to change the usual narrative with your clients, and you continue to push all risks down the chain, we simply won’t work for you

You can stop this by engaging with us, and listening to our advice on programme, sequence, warranty etc. Oh, and on that subject, if your client wails about wanting collateral warranties, ask them what they are looking to protect against and what those touch points look like.

It may well be that there is a better way to give them the comfort they seek, but without such a clunky and outdated liability position. Retention? Let’s not even go there.

There have been some high-profile main contractor administrations and receiverships in 2023 and no doubt there will be more in 2024. If you don’t start to change the usual narrative with your clients, and you continue to push all risks down the chain, we simply won’t work for you. We as a business are turning down more than double the amount of tenders that we choose to price.

When we do ask you if you have won the job you are asking us to invest in, help us by talking about if you have worked with that client before, how often, to what value etc. We can then make a business decision as to whether we want to invest in you by providing valuable estimator’s time.

If you push all risks down to us and the sharing is not proportionate, we will simply say no, because it is indicative of a relationship which will be confrontational (and critically, not profitable) from the start.

There is another elephant in the room too – trade credit insurance. Capacity in the market is decreasing given the industry condition. If we cannot get full insurance on you, we will ask for a payment plan which de-risks the project for us.

If you can’t/won’t agree to it, we will say thanks but no thanks. If you want to take risk with your business, that is your choice, but please respect the fact that, just as you have your policies, we too have ours.

End of Days finishes when Arnie’s character impales himself on a sword, thereby sacrificing himself to prevent Satan’s endgame. Let’s hope no swords or sacrifices are necessary to prevent the demise of construction.

Mike Wharton is chief executive of Complete Roofing Systems