Clash points

As it has been almost two years since the implementation of the Construction Act, I thought it would be thought-provoking to ask if the legislation has reduced conflict between main contractors and their subcontractors.

Without wanting to sound like Ken Livingstone talking to Frank Dobson, Rudi and I do share a number of common policy objectives. Many of the industry’s continuing problems affect both main contractors and subcontractors. Perhaps in the future we should concentrate more on these areas of common interest rather than conflict.

A lot has been written in Building recently about whether the Construction Act needs amendment and so-called “abuses” of it. The Constructors Liaison Group has been responsible for monitoring the act in practice. My experience suggests that it has had a positive effect and is producing the beginnings of the cultural change envisaged by Sir Michael Latham.

The knowledge that adjudication is available, that parties are willing to use it and that the courts will enforce it has imposed a new discipline on the industry. Problems are being dealt with more quickly and more effectively before the site personnel get involved in – and embittered by – a period of trench warfare.

This conciliatory approach is reaping rewards and demonstrating to people who have become used to the old ways of working that there might be something to say for the new approach. At the end of the day, it is people who make partnering arrangements work. Contracts can assist by providing a framework that can facilitate partnership, co-operation, trust and teamwork, but if individuals are not committed to working in a new way, the best contract in the world will fail to have any impact.

If main contractors and subcontractors can take these new-found relationships forward, they can actually start concentrating on the big issues of common interest:

• The overuse of performance bonds

• The use of cash retention

• The use of standard unamended contracts

• The full involvement of the whole supply chain at an early enough stage to allow them to deliver what the client really wants

• Sustainable construction to meet the ever-increasing demands of clients and the public at large.

These issues are best dealt with by allowing main contractors and subcontractors to continue to develop mature commercial relationships. More legislation would be over-prescriptive and could undermine innovative arrangements – like the formation of cluster groups, which are developing as a result of prime contracting. If the industry embraces the true philosophy behind the concept of clusters, then we will see the development of relationships based on equal partnerships, with every member of the supply chain recognising and valuing one another’s contribution.

Calls for further legislation will simply send out the wrong message to clients and government. It would indicate that the industry is unable to rise to the new challenges being set for it and that it is more concerned with the issues of the past than new ambitions.