Subbies take another bashing

Main contractors are dramatically reducing the number of specialists they work with to reduce the risk of supplier insolvency, reports Building magazine.

Wates has cut its supplier list from 4,000 to 3,000 with plans to take it down to 1,500 by 2012. Morgan Ashurst, the construction management arm of Morgan Sindall, has reduced suppliers from 3,000 to 500 in the past year and further cuts are mooted. And Costain's programme of changes will see its 18,000 subcontractors slashed to between 2,000 and 3,000 by the end of the year, said Building.

Andrew Laird, group commercial director of Wates warned of though tests for those wanting to stay on its preferred list, saying the move was aimed at fostering innovation in construction techniques. Costain's procurement director Chris Squires told Building: 'I'm worried about insolvencies in the specialist market and I want to weed out small, fly-by-night organisations. We want to work with fewer, quality contractors.'

Reacting angrily to the news, Rudi Klein, chief executive of the Specialist Engineering Contractors' Group, said: 'If this means smaller firms will miss out this is a massive concern.'

In a further act of rebellion, main contractors are refusing requests from specialists wanting to be paid using BACS electronic transfer over the traditional 'cheques in the post' method, reported Contedact Journal (CJ).

The Office of Government Commerce's fair payment charter recommends the use of BACS over cheques on all public projects, but subbies who have written to contractors requesting the system have been roundly refused.

CJ said main contractors are insisting that cheques remain a 'perfectly acceptable' form of payment, while one subcontractor claimed to have been met with verbal abuse for even suggesting BACS payment.

Suzannah Nichol, chief executive of the National Specialist Contractors' Council (NSCC), is advising member to request BACS payment despite the negative responses. 'I am sure the OGC will be interested in the responses [received so far], particularly from main contractors looking to work on government projects,' she told CJ.

Meanwhile, the NSCC said it will extend its fair payment campaign to Scotland and Northern Ireland, reported Building. Having launched in England and Wales last year, the trade body will now run a series of seminars for contractors in Scotland on March 4 and in Northern Ireland on April 17.