Jacob Austin 00:00:17 Hi all, Jacob Austin here from QS.Zone. And welcome to episode 54 of The Subcontractors Blueprint, the show where subcontractors will learn how to ensure profitability, improve cash flow and grow their business. Today's episode, number 54, is about handover procedures and handover requirements. Because I got involved in a bit of a debate with the subcontractor about the amount of documents that they had to provide for the main contractor that they were working for, and they were actually being held some money back for them, and they just thought, oh, this is the contractor shafting me at the end of the job because I've not done this and that and completely didn't understand the ramifications that that would have for the main contractor and some of the terms and conditions that clients are trying to insert into contracts these days. That would have made that situation even worse. So we'll dig into that in just a minute. And if you're new to the show, please do subscribe for more user friendly advice on all things subcontracting. So let's just tell you a bit about this debate, because the contractor that I was speaking to was having some ten grand or so held out of his application because he'd failed to provide one a collateral warranty, but then to some other documents which were supposed to form part of the O&M manual for the building, and they were having a writer whinge about it, saying that the contractor was sube bashing, that they've done a cracking job, and now that they've got to the end of it, they've had all the work.
Jacob Austin 00:01:46 They're stitching me up cos I haven't provided some bits of paper, they're not worth anything and that anyone could download some of the documents off the internet. But after a little bit more questioning, it turned out that one of them was the collateral warranty, and another one was all of the product details and actually included a product warranty, or at least a building performance statement or something of that effect, saying that the flat roofing products that have been installed was going to last for however long, and the benefit of that should be passed on via the contractor through to the client so that they can hold it on file if there was ever an issue. So those documents are actually very worthwhile having. And in this instance, there was a real tangible value to the things that he wasn't providing, and that isn't always the case. Or certainly there isn't a lot of perceived value in some documents. But in spite of that, if there is an obligation in the main contract to pass those documents on to the client, then the contractor is likely to get themselves in trouble if they haven't obtained them from you.
Jacob Austin 00:02:49 And then we started talking about some of the repercussions of the contractor not having the documents that he's asking you for, Because not all of these things are required by the main contract, but they're required sometimes by law. And if the contractor is found to be carrying on with their construction project with no idea whether they're complying with the law or not, as you can imagine, things can get really serious, and some of the consequences for not providing them can be really quite harsh, particularly if clients as they're rolling out their contract terms, start getting their way on various amendments and some of the things that some clients want to see in their contracts really beggars belief. Because on the one hand, you've got things like fair payment charters and social value requirements and KPIs to make sure that payments are being made on time, that the right number of apprentices are being appointed on a given job, and all of these things that are done for positive reasons are then completely nullified and blown out of the water, because at the same time, these clients are then saying, if I don't get a collateral warranty from some of the key subcontractors immediately, then I'm going to rule out paying them anything whatsoever.
Jacob Austin 00:04:03 And for me, that is baffling because you're telling the main contractor if they don't pay them on time, then you're in the bad books. But if I say so, then you don't pay them anything at all. Now how is that right? How does that maintain the cash flow down to the people who are actually doing the work? And what they're asking is that right at the start, when it's the worst point in the cash flow for any subcontractor, they're demanding that not only the main contractor doesn't pay the subcontractor, but that the main contractor themselves won't get paid for whatever work until the collateral warranty is in place. I just find that concept completely unfair. And just to put you in the picture, before a contractor can start bidding for certain pieces of work, they have to fill out a pre-qualification questionnaire. And some of these take various different forms, but they largely follow the similar recipe of demanding to know how many employees the contractor has, what their turnover, and all of the important things that you might need to know, including whether the contractor has built similar kinds of projects before and whether they've got a team within the office that's going to deliver the project that will be capable of doing that job.
Jacob Austin 00:05:08 That all sounds fine to me, but they're now asking for the contractors to have done the same throughout their whole supply chain, and asking for the same obligations that the client will put onto that contractor to be cascaded downstream, so that every step from them as the client, all the way down to the people doing the work of complied with the likes of equal opportunities policies, anti-bribery and corruption policies, anti slave labor policies, measures to deal with Ir35 and tax avoidance, as well as your usual health and safety and environmental requirements. And what this is then meaning is that each contractor has to have this register of approved documents of approved contractors, and it generates so much work that the contractors then outsource that to these accreditation houses and get it done by somebody else on their behalf. And it's that directly from the clients that is generating this whole industry within itself of 10,000 different accreditation houses. And if you want to work for each of the main contractors out there and spread your turnover across a number of different sources to manage your risk.
Jacob Austin 00:06:14 Then you've got to hold one of each of these accreditations. It's absolutely mind boggling. Anyway, I've wondered about that on the show before, and I've headed down that rabbit hole again, probably because it winds me up so much as I'm guessing it does you. But it's just to satisfy these bastard tick boxes that you're regularly find yourself having to reassess your business against a different set of criteria just to get your hands on some money that you've already done the work and earned before you later find yourself on stop because your subscription has lapsed or your certificates two days out of date, but various requirements crop up throughout the course of the job, and a lot of these requirements come about because of genuine need. So the likes of your waste transfer notes now everybody's seen fly tipping at some point, be it on a construction site or on some piece of farmers land that you've happened to drive past. And as with a lot of these things, is because a certain few little amount of people go around doing things that they really shouldn't do, that it creates a ball of work for everybody who's doing things by the book.
Jacob Austin 00:07:17 And authorities can drop in on site at the drop of a hat and demand to see a contractor's waste, transfer tickets for everything that they've taken off offsite, and if they're found to not have them, they can be in for substantial fines and it more than likely be in the press with an almost endless list on the Environment Agency's website. Of all the potential offenses you can commit, resulting in a range of stop notices, warnings, formal cautions and prosecution. And so when a contractor is asking you for these tickets to evidence that you've taken away your waste responsibly, this isn't just the contractor wanting to tick a box for the sake of it. This is to mitigate a very real threat of prosecution. And because construction waste is the most commonly disposed of waste material, this is happy hunting ground for environmental assessors, and also because they perceive the main contractors to have deep pockets, they'll be quite happy to slap out multi-million pound fines against the big name contractors for failing to uphold the law, so contractors and even individuals have that responsibility to make sure their waste is being dealt with aboveboard and by a carrier that has a proper, valid waste carrier's licence.
Jacob Austin 00:08:31 So, quite rightly, that obligation is passed on to the people who may be sourcing that disposal, which may, of course be you. There are then also various permits that may be required during the course of a construction project for the disposal of certain hazardous materials, or even the removal of those materials for things like sewerage discharge and drainage connections, and for entering a site across a public highway or public footpath. Even now, you might find yourself obligated with some of these requirements, as in, the contractor has asked you when they've bought the work from you to obtain the permit on their behalf, because you'll be the person actually carrying out the physical work. And given that the contractor will get a heavy penalty for failing to comply with these requirements, it's only fair that you should share those documents with your contractor to demonstrate that permissions are in place. And again, this isn't just to tick the box. Another piece of paper exercise. This is the contractor making sure that you have covered yourself and therefore you've covered the contractor from a pretty real threat of fines and prosecution.
Jacob Austin 00:09:35 But now, when it gets to the end of the project, when everything has been running at 100 miles an hour and everybody's pulling in the same direction to try and get the job over the line, there is an absolute glut of paperwork to be produced, and these will stem from surveys to product warranties to various user guides, specs and instruction books to tell the end user of the new building what they need to do to work in that building, where the hazards might be if they start opening up the building to do an extension or something of that ilk, what kind of products and operations they need to carry out to be able to keep it safe and clean, as well as certain performance assessment criteria being ticked, such as a brief assessment and any specific requirements of KPIs for our framework, or indeed for a one off project that a client has asked for throughout the course of a job. And a lot of these can contain some overlapping requirements, so your health and safety file will need a project overview along with the list of residual hazards.
Jacob Austin 00:10:34 There couldn't be eliminated during the course of the construction. Information on key services where the routes are throughout the building, and safety precautions to be taken when working nearby to them. The safe working loads for floors and roofs and other parts of the structure, and of course the good old as built drawings and surveys. And most of those items will also be required as part of the owner's manual. But then that also needs your warranties and your guarantees. The list of spare parts that you might need to maintain. Plant and equipment A list of contact information for people who have designed and worked on the building, and would be qualified to maintain it. Asset lists all of your usual use requirements, such as startup and shutdown procedures, and what to do in an emergency. All of your maintenance requirements, including planned and preventative maintenance, as well as your corrective action plans should things go wrong. If the building is divided up into a number of units that are then divvied out to potential purchasers, or you're working on a site which has got multiple plots such as houses or apartments, then each of these dwellings or different units will require its own set of key information.
Jacob Austin 00:11:48 Now, I'm not just telling you all of this so that you feel sorry for the main contractor about all of the paper that they've got to print out and collate, or perhaps assemble into some kind of order in an online folder system. I'm telling you this because these are often requirements that are a precursor to achieving practical completion on a project. Clients will specify that they need the finished O&M manual and the finished health and safety file before practical completion. And what that means is, if you miss your piece of paper being submitted at the right time, you're going to jeopardize the completion of the project for everybody involved in it, and so why risk it? You know what products you've bought and installed in a project by the time you finished it, you probably know it partway through the project. So as you are placing your orders, be proactive about it. Download your product data, information, the fact sheets, the cost data, the maintenance requirements. Most of this information is pretty readily available. and if you're involved in any kind of value engineering, it's an absolute must so that you can submit that information along with your bid to qualify what you're pricing for.
Jacob Austin 00:12:54 So what I'm asking is why leave it until the end of the job? You know, you're going to be asked for this stuff. And rather than risk being the delay that tips that project into an LED period on top of causing the contractor and any other people that might be on site at that point, all the extra hassle and cost of staying there for longer, keeping the building clean, and mopping up those snags that seemed to just appear out of nowhere. When you hold on to a building for longer than you need to download it at the start. Those companies that don't have the information readily available on their website, which from my experience isn't that many. They have a technical team that are more than happy to send you all of their technical data, and will almost certainly treat it as a bit of a bragging exercise to show this is how good all of my products are. Make sure your users are on your next site. And so my point is, this isn't just an obligation that you should find yourself failing on at the end of the job because you know from the start what you're being contracted to provide and as and when you get variations, you know, whether they're adding some new elements of scope that you then need to provide more information for, and hopefully you can even introduce a reasonable charge for more information within your cost of your change, assuming that the scale of the change requires it, of course.
Jacob Austin 00:14:10 And so failing to provide that information is really just a symptom of not planning properly at the right time, and a bit of a mindset shift towards more proactive thinking on this can save you a world of pain and make that transition to the end of the job so much easier. And so I'm giving you my thoughts on how you should best manage this. And that is, as you're placing your orders for products you're buying for a job, you collate the data sheets that come with those orders and come with those products. And all that should leave you behind is any testing certificates that are required after you've installed. So it's then just a case of watching out for those as and when you've commissioned or when you've tested your products, and that becomes then a matter of a quick email. I've got the cert, here you go. Job done. And these things are things that you can't get away from. So why wait until the pressure's on and your mind is focused on getting the job finished to start providing them? Why not do it when the pressure's off? When you still got that good feeling about securing a nice big piece of work, and do it on your own terms in your own time.
Jacob Austin 00:15:14 Take the stress out of practical completion with a bit of proactive management, and I'm going to wrap up there for today. I hope that gives you some food for thought. My mission is to help the million SME contractors working out there in our industry. If you've taken some value away from today's episode, I'd love it if you'd share that value and pass the show on to somebody else who would benefit from hearing it. And of course, subscribe yourself if you haven't already. Thanks for tuning in. If you like what you've heard and you want to learn more, please do find us at Weeks Zone where you can subscribe to our training and support system for like minded subcontractors. In there you'll find templates, how to videos, interviews and more. And it's less than the price of a cup of coffee per day. Of course, you can cancel anytime and also on all your favorite socials at SHS zone. Please do look me up, shout at me, tell me what you liked or didn't like and keep the conversation going.
Jacob Austin 00:16:11 Thanks again. I've been Jacob Austin and you've been awesome.
