Administrator says non-payment by main contractors sent sub-contractor into administration

Electrical wiring

Main contractors’ failures to pay invoices have been blamed for driving an Essex mechanical and electrical contractor into administration.

HPEMS Limited appointed administrators Jamie Taylor and Dominik Czerwinke from accountants Begbies Traynor on 18 September.

A spokesperson for Begbies Traynor said: “The appointment was made as a result of non payment from the main contractors for substantial sums, which the joint administrators are now pursuing.”

He confirmed that 14 staff at the firm had claims against the firm, which has offices in London and Nottingham, for money owed to them.

He added: “No buyer is being sought for the company.”

Payment to subcontractors has been a growing concern in the industry in recent months.

Last month, Building revealed contractors Balfour Beatty and Kier were launching supply chain finance schemes, which allow suppliers to get paid earlier than their contracted terms – sometimes for a small charge - to improve payment to their supply chain.

Balfour Beatty and Kier’s move follows in the footsteps of Carillion, which launched a early payment scheme earlier this year. Carillion’s scheme has proved controversial because suppliers wishing to use it must agree to payment terms of 120 days.

Other contractors considering such a move include ISG, Galliford Try and Willmott Dixon.