How can the IPCA help you to keep afloat in the busy seaways of business?
Matt Bailey talks to Brian Coogan, CEO of the IPCA about how the association is working on your behalf to guarantee on-time payment.
Matt Bailey talks to Brian Coogan, CEO of the IPCA about how the association is working on your behalf to guarantee on-time payment. The plant contracting industry faces many challenges, but there are two major issues that currently need addressing the most urgently. Firstly there is the all too familiar scenario, says IPCA CEO Brian Coogan. You’ve done the work, you’ve invoiced the main contractor but no payment is forthcoming. This situation needs to be addressed. Many smaller organisations are being fatally squeezed by the cash flow problems resulting from late or non-payment for works done. In the past few months the ipca (irish plant contractors association) has recovered up to 300,000 for its members that were owed money from main contractors. While this services – free to IPCA members – is a great start in tackling the issue it really demonstrates the scale of the problem.
Protect the bottom line – price the job effectively
Secondly we also have the problem of undercutting, adds Brian. In a competitive market it is vital that we don’t get into a race to the bottom when it comes to subcontractors quoting for jobs. There has been a trend where subcontractors of all sizes are varying for business with each other, undercutting on price in order to secure the work but this situation can only end up harming all participants. What we need are industry standards and to charge a fair and reasonable rate for the work done. If we keep reducing our costs it is going to effect the quality of the work and standards will go out the window. And in our industry it is essential that we have high standards. I call on the everyone to get behind the objectives of the IPCA to ensure the strength and survival of the industry, says Brian.
Tackling non payment
The best way to tackle non-payment is by being organised and professional in all your dealings with main contractors, Brian states. A lot of subcontractors get into trouble as a result of their paperwork not being in order and in some cases agreeing to works over the phone without ever having anything, including the amount they will get paid for the job, in writing. The IPCA works with experienced adjudicator Keith Kelliher and a range of other professional services to ensure that IPCA members are protected from the risks of unpaid debts as well as offering great advice to subcontractors on how to avoid the situation in the first place. This is something I deal with on a daily basis, says Keith. The companies most likely to succeed in getting the money they are owed are the ones that are professional, the ones that get proper contracts and keep a proper record of all their dealings with their clients. Many developers and main contractors know that they could benefit if a subcontractors house is not in order. The job needs to be priced correctly with all the correct paperwork signed off and squared away properly. Read the contract! Warns Keith. Not only that, dont be afraid to decline parts of it and negotiate. I saw one contract where it stipulated that the subcontractor had to provide breakfast rolls for everyone at every meeting they attended! On another, the subbie was contracted to provide all the ppe for everyone on site. Clearly these are unreasonable demands and can and should be deleted as part of the contract negotiation. Only by ready the contract carefully can you avoid the crazy stuff, offers Brian Coogan. Once you are happy with the contract, sign it and send it on paper by registered post to the client and ask for any subsequent instructions to be submitted on paper and keep an up to date record. Job variations – new bits of the job added in once it is underway – can also hit the subcontractors bottom line if they are added in without the costs being agreed in advance in writing. There is no contract in ireland that allows anyone to carry out any works solely on a verbal basis, Keith says. Always get verbal requests and variations in writing before you agree to do them. Say no to any verbal requests until you have them on paper. Keep records of any variations and keep a record of the job length and send them to the main contractor on a monthly basis – dont wait months before submitting paperwork. Its called contemporaneous record keeping. You need to have a mentality of keeping all records and costs up to date. Make records and take pictures of the work done because by the time you are chasing payment, all the pipes you have installed might be metres under recently laid turf, says Keith. Present your records and information so that the parish priest would be able to understand the work you have done. There are 36 people on the adjudication panel from a variety of backgrounds, dont assume they will understand your job. Keith suggests that Kicrosoft Excel is a great way to keep all the information together. It is a wonderful tool, he says. Put everything in a spreadsheet but remember that the spreadsheet isn’t evidence by itself. You also need all the dated documentation.
Back to the future
I advise clients to go back to the way we used to do things in the past, before email, says Keith. Follow up face to face meetings with a written confirmation of what was agreed. This approach prevents the escalation of minor issues into major problems. Be prepared and be organised, and remember, adds Keith, if you can’t prove your case in a way that the parish priest would understand it, you will lose.