'cowboy' builder- sub contractors picket.

jonniebgood1

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There is a news story emerging in Ireland with a 'cowboy' contractor:
The story has received some media coverage , where the “cowboy” tag appears . The allegation being that the builder despite being paid himself has not being paying his sub contractors. Consequently these subcontractors have been picketing a school where the builder worked . The electricians, plasterers, builders and plumbers blocked off the entrance to the school .

The board of management the school said it had paid the main contracting company in full and on time and that the sub-contractors' grievance is with the main contractor and not with the school.

Am I on my own thinking these type of people are a disgrace. I do not know how builders can get someone to do a job and then brazenly not pay them.

The protestors have valid complaints but perhaps they should be picketting the owner of the construction company rather than the school.

Any opinions?

sydthebeat

they certainly are wrong to picket the school!
Its nothing to do with the school or bord of management.

i see this as a result of many main contractors coming in 'below cost' on jobs now, and in the end trying to squeeze everybody. The probably have factored in expecting the sub contractors to accept losses in order to get anything.

I also see this as a wake up to many sub contractors.. its not 2006 anymore and theres no guarantee of 'the next job'. Therefore they need to buck up on proper business procedures such as contact agreements, receiving agreed staged payments for work etc to ensure the risk of this kind of thing happening is minimised as much as possible. Especially in a climate where the main contractor can actual determine the price he will pay!!

martinn123

This is crazy.

To quote from Syd's link,

The Society of Chartered Surveyors in Ireland says that the percentage of tenders being submitted ‘below cost’ has increased to 52 per cent – up from 37 per cent around two years ago.
Its survey added that below-cost tenders were, on average, valued 17 per cent lower than their true cost – and warned that below-cost tendering was “unsustainable” and “will result in longer-term problems for industry clients”.

and

Over two-thirds of projects which failed to be completed were public projects.

So 1/2 of tenders are ''below cost'' by on average 17%,
and
2/3rds of failed contracts are ''Public''

Who is monitoring this on behalf of the tax-payer, how can the '' clients'' justify accepting the lowest price, if the Surveyor states its below cost.

mfceiling

Getting out of hand lads.
Seeing ridiculous figures knocking about at present.
Quoted a job last week and was told that another guy was 30% cheaper and was supplying twice as much material and labour.
The material cost alone was higher than his price for the job...and I can buy as cheap if not cheaper than anyone.
Thankfully the builder has copped this as well and basically asked the guy for a breakdown on figures...he won't answer calls or texts from the builder now.

DOCARCH

The policy of awarding of contracts/selection of contractors by government bodies - who are obliged to go with the lowest price - really needs to be looked at again.

Awarding of contracts/selection of contractors now really needs to be by means of MEAT selection (Most Economically Advantageous Tender). Some government bodies are now starting to cop on to this.

sydthebeat

DOCARCH wrote: »

The policy of awarding of contracts/selection of contractors by government bodies - who are obliged to go with the lowest price - really needs to be looked at again.

Awarding of contracts/selection of contractors now really needs to be by means of MEAT selection (Most Economically Advantageous Tender). Some government bodies are now starting to cop on to this.

i agree, but MEAT has its own issues and puts much more responsibility onto the awarding body.

Just to clarify, i am not saying that this OP is as a result of under pricing, but i can see the results as outlining above as being indicative of what can happen when this is allowed.

sinnerboy

This issue was adressed by Sen Fergal Quinn see here. How effective it will be .....

sinnerboy

sydthebeat wrote: »

they certainly are wrong to picket the school!
Its nothing to do with the school or bord of management.

I do agree but sypmathise with their actions.

The individual "breakfast roll man" is being caught up in the minds of too many with a backlash of "good enough for them" ,they "made their money" during the boom and they can "get real" now.

For too many of them "getting real" will mean losing their homes.

Desperate times , desperate measures.

sydthebeat

maybe but their ire is focused on the wrong place.
What do they think can happen if they picket the school? Im sure its unsettling for the staff and clients of the school who are completely innocent.

why arent they camped out out side this guys home, or his place of work, or both?

jonniebgood1

sydthebeat wrote: »

i agree, but MEAT has its own issues and puts much more responsibility onto the awarding body.

Just to clarify, i am not saying that this OP is as a result of under pricing, but i can see the results as outlining above as being indicative of what can happen when this is allowed.

I am familiar with the company involved and know that under pricing to keep a revenue stream in motion was a factor.

With regard to MEAT I think the clients representatives on a project need to be given more control. At the moment on a government project a QS can fully understand that a tender price is unrealistic. By unrealistic I mean that it is obvious that somebody (usually a sub-contractor) will get cut. Despite this being obvious all they can do is ask the tenderer if they will stand over their price. If they agree to stand over the price then they are accepted on a job. IMO they need to hand some of the power and responsibility back to the Architect and QS in the selection process as the PQQ system is not eliminating 'cowboys' as per my OP.

sinnerboy

sydthebeat wrote: »

maybe but their ire is focused on the wrong place.
What do they think can happen if they picket the school? Im sure its unsettling for the staff and clients of the school who are completely innocent.

Well we have a terrific capacity here to compartmentalize issues when do do not directly impact upon us. What will "the rest of us" feel when our neighbors houses are emptied out after reposesion or do we want to wait to see when it happens how "unsettling" will that be?

The "innocent" school governing body did not procure this contract with integrity - in my opinion . If they had they would have received and acted upon the advice of a competent QS to advise them not to do business with a company with such an alleged reputation .

Persnally I do not accept the schools position that

the sub-contractors' grievance is with the main contractor and not with the school.

. That's morally bankrupt if technically correct.

The fact that Sen. Quinn must legislate for fairness and equity in this industry is shaming our collective eyes in this society. Do we care who we do business with once the price is right ?

So far as the staff in the school , unionised and with lobbyist imploring "we did not cause the economic meltdown" being "unsettled" what does ANY reader here beleive we will see if that profession is dealt the same hand that our Industry has been dealt ? One thing that irks me greatly in "the national debate" is the absence of any co ordinate lobbying voice for construction workers. It's acceptable that they should either work on min wage or absent themselves from this society. Again.

sydthebeat wrote: »

why arent they camped out out side this guys home, or his place of work, or both?

I doubt that would attract any requisite attention .

jonniebgood1

sinnerboy wrote: »

The "innocent" school governing body did not procure this contract with integrity - in my opinion . If they had they would have received and acted upon the advice of a competent QS to advise them not to do business with a company with such an alleged reputation .

Persnally I do not accept the schools position that . That's morally bankrupt if technically correct.
.

But is'nt the problem with the governments standard form of contract for public works. This sets in stone that the lowest tenderer must be appointed (unless they have ommited some significant works- if they have they must be made aware of that and still have the option of standing over their price AFAIK). As the project is a school, i.e. public works, the design team would have consisted of an experienced Architect and QS. Despite the firms reputation they had the lowest price thus had to be accepted.

Radiotower

mfceiling wrote: »

Getting out of hand lads.
Seeing ridiculous figures knocking about at present.
Quoted a job last week and was told that another guy was 30% cheaper and was supplying twice as much material and labour.
The material cost alone was higher than his price for the job...and I can buy as cheap if not cheaper than anyone.
Thankfully the builder has copped this as well and basically asked the guy for a breakdown on figures...he won't answer calls or texts from the builder now.

I worked for a main contractor up until Dec 09 - they had priced a job in the city then knocked Euro 1million off it in the hope of winning the job and taking the hit. It would have kept alot of us in work for two years at least. They submitted the tender and ended up been Euro 4m above the lowest price. Haven't heard anything about subbies not been paid yet but there's probably 10months left on that project..

bruschi

without ranting too much, but the whole tendering process, and evaluation is at the moment, absolutley ridiculous. they spent millions bringing in a new Pre Qual proceedure, and form of contract, and both are worthless.

Pre quals have in the majority of cases an emphasis on turnover. Turnover cna be achieved by taking on a crap load of jobs and getting money in. it doesnt evaluate how much profit or money is in accounts. the financial letter is a misnomer and isnt worth anything. too many big companies took on jobs just to keep the turnover figure large. one job I priced, and 2 of the competetors had gone bust between submitting the tender, and the job starting 4 weeks later. how can companies like that be able to be selected?

and the whole tendering costs issue is gone overboard. its only lately that its coming to light that tenderers cant meet their prices, and what either happens is there are lots of claims and variations being submitted and causing heartache, or the builder folds. Anyone could have told them that 2 years ago when it was blatently obvious what was happening.

a recent job I know of saw the builder who was third on the list get the job. the QS didnt truct the top 2's price and found out that they were 'waiting in the long grass'. one of them on a previous similar job submitted a variation for 200k the day the job started, as there was mistakes in the BOQ/drawings. the QS asked the first and second to submit their costs, and stand over them. they did, but he didnt trust it. and as it turned out, went to third, and found their costs competetive, but achievable. he now has a job that will run a lot smoother and knows the client will get a quality job finished for the price tendered. more of this needs to happen.

pavb2

For me the flaw in the system is the school paying the main contractor in the first place.

I would say every sub contractors without exception would prefer to be paid direct by the school/client and avoid having to jump through hoops for what they're entitled to. Sub contractors are at the mercy of the of the m.c.'s wondering if they're going to get paid mc going bust etc and this does seem to be the norm.

Ok let the m.c. manage the site but all financial aspects should be seperate a bit more admin maybe but an architect normally signs off on work completed anyway

And as for getting back retention monies ?? My experience is that any contracts aren't worth the paper they're written on unless of course it's in the m.c.'s interest.

The "innocent" school governing body did not procure this contract with integrity - in my opinion . If they had they would have received and acted upon the advice of a competent QS to advise them not to do business with a company with such an alleged reputation . This is the crux of the above case the operative word being integrity but more so on the builder's part

bruschi

pavb2 wrote: »

For me the flaw in the system is the school paying the main contractor in the first place.

I would say every sub contractors without exception would prefer to be paid direct by the school/client and avoid having to jump through hoops for what they're entitled to. Sub contractors are at the mercy of the of the m.c.'s wondering if they're going to get paid mc going bust etc and this does seem to be the norm.

Ok let the m.c. manage the site but all financial aspects should be seperate a bit more admin maybe but an architect normally signs off on work completed anyway

And as for getting back retention monies ?? My experience is that any contracts aren't worth the paper they're written on unless of course it's in the m.c.'s interest.

The "innocent" school governing body did not procure this contract with integrity - in my opinion . If they had they would have received and acted upon the advice of a competent QS to advise them not to do business with a company with such an alleged reputation . This is the crux of the above case the operative word being integrity but more so on the builder's part

I understand where you are coming from, but that is completley unworkable. basically, it would boil down to being a self build operation, and no architect or QS wants that. not only is there more paperwork, but heaps more procurement on every sub contract package and at least by having a main contractor, the onus is on them to complete the project.

I agree that the onus is on the school/design team to ensure they have the proper MC in place, but if you take out payments made to MC and pay subbies direct, then you wont have a main contractor, and no one to co ordinate and manage a project.

sub contractors have to be intelligent too. if you know a contractor is dodgy, then dont work for them. I know of lads who took jobs for peanuts being promised a decent one down the line. the one down the line never comes and they are left short changed. better off not working than working hard and losing money.

sinnerboy

jonniebgood1 wrote: »

But is'nt the problem with the governments standard form of contract for public works. This sets in stone that the lowest tenderer must be appointed (unless they have ommited some significant works- if they have they must be made aware of that and still have the option of standing over their price AFAIK). As the project is a school, i.e. public works, the design team would have consisted of an experienced Architect and QS. Despite the firms reputation they had the lowest price thus had to be accepted.

Well yes the schools hands were tied here. But I am talking about a moral tie. The school and all who use it benefited from works by men who were not paid for that work. It is appropriate for those men to protest there - peacefully of course.

For the sake of all concerned they should desist from blocking the school entrance of course , that helps no one. But morally the school should not hide behind the contractual distance between the school and these men. Could be a father of one of the pupils protesting.

pavb2

sub contractors have to be intelligent too. if you know a contractor is dodgy, then dont work for them. I know of lads who took jobs for peanuts being promised a decent one down the line. the one down the line never comes and they are left short changed. better off not working than working hard and losing money

Agree with you here but when bills have to be paid desperation can cloud your judgement you almost convince yourself maybe this time it will be all right.

I've also realised that you are better off not working than losing money but I think the phrase is 'counter intuitive' as this takes a massive fundamental change in one's thinking. It goes completely against the grain and it's difficult to walk away from projects especially with bills to pay but in the long run it's the only way for survival