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How to Avoid Payless Notices

How to Avoid Payless Notices

Key points for Sub-Contractors to Avoid Payless Notices

Understand your Contractual Obligations

Prior to signing a contract, make sure that you have read the finer points of it. The key areas to look at (but not exhaustive) are:

  • Contract value
  • Scope of Works
  • Conditions of Contract
  • Remeasurement/Lump Sum?
  • MCD’s
  • Retentions
  • LAD’s
  • Site attendances
  • Hours of working
  • Programme duration
  • Relationship building

I have always found that building relationships with the site team (both operationally & commercially) is the best way forward. This can be done through weekly informal chats, regular phone calls and even over lunch. The key here is to get your client on your side and working with you rather than against you.

I have witnessed it many times: where things are resolved either over e-mail (things starts to get impersonal and cold) or worse still taking problems up the tree rather than sorting out on the ground (i.e. at site level). If you get the site teams’ leaders involved, it can end up in you being the enemy rather than the ally.

Project Documentation

Having resources for site recording is certainly a key that must be used and adopted from day one. These documents could become critical from a commercial point of view, if the project does start to go horribly wrong (i.e. variations not being paid, programme runs away and ends up with LAD’s being deducted).

The key documents which have been mentioned in previous blogs are:

  • Daily site diaries
  • System to take and record photos
  • CVI’s and CVI register
  • Labour resource sheets
  • Sub-Contractors signing in & out sheets
  • RFI register
  • Progress minutes
  • Timeous notifications

Briefly on the operational side, make sure:

  • Instructions or CVI’s are signed/received on a weekly basis
  • Don’t be handing a high bundle in at the one time
  • RFI’s are submitted giving the client sufficient time to answer
  • Daily site diaries are kept – as the name suggests, to be done on a daily basis.

From a commercial side, the key is to give as much notice of additional costs as soon as possible – i.e. as soon as they become apparent. The sooner you let your client’s QS know, the sooner it can be included in their own cost reports upline and included in their budget.

Also, as you send in your interim valuations, add a further tab at the end for a FFA (Forecast Final Account). This is a key document, as in some respects you are doing the Client’s QS’s homework for them. In this document, I would always include the contract works (less any provisional sums) as well as all variations to date (even if not started/completed). I would also include any other items, with allowances beside them if known. In the end, some of these may not be required, but you are reporting to the QS what you believe to be the maximum FA at that stage (i.e. a snapshot of current events).

Signing In & Out

This does on the face of it seem a ridiculous point to make, as it seems an obvious thing to do (especially from a Health & Safety point of view), however, it is amazing the amount of times operatives do not follow this requirement. Yes, they have been running late and don’t want to record the fact and get into trouble from their senior management (we all sleep in, we are only human).

The amount of times I have seen Main Contractors using this against the subcontractor is amazing. At the end of the day, when valuing someone’s account it should be done in a professional manner and by that I mean going with the evidence they have. If operatives do not sign in and you are claiming for dayworks on that particular day, the QS is quite within their rights to not pay as it clearly showed that no workers were on site. Do not give the QS an easy out.

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