Deck the halls with boughs of holly/Here’s some advice on saving lolly/Hire yourself a new surveyor/Who’ll collect evidence against the payer …
Three things at least are unchanged since the fourth century; Christmas has been the feast of Christ’s birth. It has been a holiday. And more particularly, it has been our long building industry holiday. Reflect for a moment on the sudden appearance of that bright star, the settlement of a final account. Think Christmas, think goodwill, think compromise … sweep up and then go on holiday. Christmas – one helluva time to do a deal and settle a dispute. Then, when you come back in January, start kicking and screaming and whingeing all over again; oh, and do a bit of building while you’re at it.
Look, the new year will bring all the same varieties of disputes. Relax, they are ordinary; they are inevitable. The job you bid for, the job you are now doing, starts out as one thing and ends up as another. The work in the ground will be described, even drawn, but it will change; the structure, the windows, the roof and the escutcheon on the soffits of the finial will change. The M&E will not change a bit; it will change a lot. Ceilings will be lowered, raised floors will be made higher and partitions will be installed then moved. The contract period of 50 weeks will by now have reached week 81.
Am I talking about your job? No, it’s jobs far and wide, high and low, all over. It’s been like this since Christmas was invented.
If ever there is a common thread of trouble it’s the “change order”, “variations” or “varied works”. It’s the meat and veg of building. It’s the first misunderstanding of contractors and subcontractors. The contract says variations are to be expected and to be done and to be priced and to be adjusted for time because they happen. It’s not that the builder doesn’t expect changes; the misunderstanding is to expect to be paid without a time lag. Then there is the misunderstanding about getting extra time without lag. Spirits and morale flag when the money doesn’t flow fast enough after all the changes. Don’t give me the rot that “pay when paid” has gone; it hasn’t. When the employer lags in paying the contractor for all the changes, the contractor lags in paying its subcontractors. Discipline goes, and so do the flooring contractor’s best men.
Why the lag? Variations don’t get paid fast because the employer’s quantity surveyor isn’t as fast and loose as it once was. Same with extensions of time by architects; these folk are ever so much more careful about dishing out time. In Christmas past a QS would “pay something on account”. An interim payment was a “pay something now, argue later”. There is a snag nowadays. The QS is likely to be sued if it is arbitrary or offhand with an account payment to contractors. Its job is to formally interrogate the amount claimed for extras. The time lag is the interrogation period. Contractors are still bad at providing support documents for these extras. The brute truth is that the contractor thinks the QS is deliberately underpaying. By now the subbies will be either incandescent or gone. Calling for an adjudicator is no good. The adjudicator will look for a full explanation, proof, rights and duties of each extra. No adjudicator will hand out cash on account like a Father Christmas with a sack of goodies.
Calling for an adjudicator is no good. No adjudicator will cough up some cash on account like a Father Christmas with a sack of goodies
A variation will almost certainly affect time, almost certainly affect productivity, almost certainly affect the pocket, almost certainly be a right and an obligation to perform under the contract. So, you have to be able to show how much time, productivity and cost each change has caused. And show a right to be paid.
Many Christmases ago, contractors used to employ youngsters called measuring surveyors and their job was to witness what happened on site. Record and report, measure and value. This laddie searched for facts; he wrote down what he saw and heard. He even checked the rules for getting paid. And who paid him? Easy, really: the surveyor protected from cash lag; it pays hands down. It even gets the cash down into the subbies’ hands.
Buy a present for your building firm. Buy it an on-site measuring surveyor complete with folding rod, a dim book and a donkey jacket. And, by next Christmas, you will have one of these youngsters on every site. Happy Christmas. See you next year.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on firstname.lastname@example.org.