ECA conference: payment terms still hurting

An ECA survey has revealed that members are still experiencing problems on contracts, sometimes when working as subcontractors to other ECA members.

“Payment is often late, contractors are underpaid, there are undervaluation of variations and unclear contract conditions,” revealed ECA past president Bill Wright, of W Wright Electrical, and chairman of the Association’s commercial, contracts and legal committee.

He told delegates at the ECA’s conference in Marbella that 32% of the 282 respondents to the ECA survey had worked as sub-subcontractors, with most of those medium sized firms.

In all, 80% would work for the subcontractor again, 59% realised their anticipated profit and 62% said there had been post-tender price negotiations of which 67% thought were fair.

More than 70% had had to wait in excess of 21 days to be paid. 47% indicated that the subcontractor had supplied materials so that they, the sub-subcontractor, had provided labour-only services. “Members would prefer to take responsibility for the timely arrival of materials,” said Wright.

The fact that 26% of respondents were responsible for someone else’s design is hugely worrying,” said Wright. “Design responsibility is passed on in clauses that are often not spotted until it is too late.”

Wright urged contractors to get a full copy of the contract before starting work, with all site instructions in writing. Firms should beware of extended liability periods and project documentation is essential as proof. “Beware also of risk dumping – you may end up with something that you’ve no insurance cover for,” said Wright.