Opinion

Low-cost culture, PwC bill, Retentions, Gender pay gap: Readers’ comments

30 April 2018

Low cost culture (04/04)

The headline “Lowest cost culture blocking BIM Level 2 adoption, says Bew” misses a subtle, but important, detail.

Wanting low costs shouldn’t be a problem. BIM should be able to help projects deliver great value and low-cost projects. If the focus is on total, final cost.

In a desire for “cost certainty” and minimised commercial risk at a work package level, we use commercial approaches that do not help achieve this. A project manager who believes that they get the lowest total cost project by letting a lot of separate fixed-price contracts for each work package is actually increasing the overall cost.

This makes for fragmented project teams. And since each contractor understandably looks after their own interests, they are incentivised not to support holistic methods that help the overall project succeed – like BIM.

Until projects realise that the commercial model is what is holding us back, and that changing it is the most reliable way to reduce total project cost, great ideas like BIM will remain frustrated and underperforming.

Ian Heptinstall

£20m PwC bill (22/03)

£1.4m per week for 112 staff. Isn’t that £12,500 per member of staff per week? That is some salary. Any chance I can have a job with PwC to run the contracts? After all, I have 30 years in the industry and a bit more experience than some accountant. Looks as though someone is getting ripped off somewhere along the line.

But don’t worry, I’m sure the taxpayer will pick up the tab.

Len Arnold

In come the accountants – to bayonet the wounded. What a disgrace.

D Wisbey 

Sadly, another example of decline in the modern UK. Companies that have to produce or manufacture must do so against competitors on tight timescales and, let’s face it, “cut each other’s throats” to obtain work – which they then struggle to complete on time and to any decent quality standard, due to years of neglect in training operatives to anything like a decent standard. Much better profit in service and support industry.

Tony Callaghan

Payment Bill receives industry backing (13/3)

As a construction director, I agree. Everyone needs more protection, but let’s not stop here. Why not review the entire payment process for all parties and make it fairer for all – for main contractors, subcontractors and consultants? Why do we have a system that allows clients to fund their projects through others?

Paul Fitzpatrick

In my experience, retention money has to be claimed by the subcontractor rather than be paid automatically in a lot of cases.

There is an argument for withholding retention in that getting snagging done is more likely to be less problematic when retention is held. Therefore, I cannot imagine the retention scenario changing.

Sean Morgan

Although I welcome the reforms in retention I don’t understand why no one is looking at the 120-day payment terms that Carillion were imposing on their subcontractors. The loss from having not been paid for up to 150 days of work would have been much more than the retention.

Payment terms need further reform and the UK should adopt a system similar to the Security of Payments legislation in Australia, which gives maximum payment terms of 15 days for head contracts and 30 days for subcontracts. This ensures that the main contractor is in positive cash flow while providing reasonable terms to the subcontractors.

Adam Arnold

This bill, whilst welcome in improving the situation, does not address the root cause, which is the imposition of cash retentions in the first place.

Also retentions are ultimately a cost to the client in that the cost of money is reflected in the contractor’s overhead.

Our industry, I believe, is alone in having retentions imposed upon it. Can you imagine holding 10% when you buy a new house or car?

John Porter

Gender pay gap (22/03)

This state of affairs is shocking and cannot continue. The industry has always been experience-led, therefore your experience denotes the value of your pay packet and not your gender.

I would not be able to forgive myself if I paid a woman less for completing the same task as a man.

I would gladly accept more women on site as I am fed up with the testosterone-fuelled environment in which I am currently forced to work.

Women on the whole can bring balance and harmony to the workplace, something decidedly lacking in our industry today.

C Betts

Image: Fenlio Kao | Dreamstime.com

Comments

Retentions don't work in the worst cases because the cost of remedial works is so high it's easier for the sub-contractor to walk away than it is to attempt to correct work they weren't competent to do in the first place.

In effect, retentions handicap the good subcontractors by restricting cash-flow and forcing them to compete with others who are simply not of the same standard.

Darren, 6 May 2018

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