Have We Reached The End Of Adversarial Relationships

Have We Reached The End Of Adversarial Relationships

Between Main Contractors And Sub Contractors? 8 November 2000

This event had a good start with Bill Tallis, Director of the Major Contractors Group within the Construction Federation, providing an initial presentation on ways of reducing or preventing the adversarial relationship; and then Professor Rudi Klein, Barrister and Chief Executive of the Specialist Engineering Contractors Group, giving a spirited defence that there was a way to go before Sub Contractors and Main Contractors could be termed as 'good bedfellows'. In fact, one quote from a Sub Contractor was that it is OK jumping into bed with a Contractor, but the problem is he has all the bed sheets!

Bill Tallis's presentation listed the contentious items as:

Ø Failure to deliver the product.

Ø Failure to deliver on time

Ø Failure on quality.

Ø Failure to pay Sub Contractors.

Ø Failure to pay contributing to insolvency.

These were exacerbated by:

Ø Lack of trust.

Ø Multitude of interfaces.

Ø Vested interest of some parties.

Ø Traditional relationships.

For which remedies were to be found in modern procurement methods, eg PFI, partnering and supply chain management. Professor Rudi Klein replied that these modern methods were great, except that they carried the same baggage that was left over from the traditional relationships. This was compounded by the total lack of management skills exhibited by Main Contractors who have problems managing traditional relationships let alone the new ideas.

Endemic throughout the construction industry, the fundamental concept of risk management has created the climate of pushing risk further down the Sub Contract ladder until the company least able to cope with the risk is left holding it.

Bill Tallis agreed management has a problem and suggested that large contractors would start to look for management expertise from manufacturers who are used to organising complex supply chains.

There was then considerable audience participation on a wide range of issues, but the essence seemed to be that three elements need to be rationalised and agreed for a non-adversarial agreement i.e. partnering etc to work, which are:

1) Human relationships Contractors / Clients need to trust each other.

2) Risk Risk must be fairly shared by Contractors, Sub Contractors and the Client.

3) Make money All Contractors should be able to make a reasonable profit. In return the Client must get the product he wants at the agreed price and time.

David A Bailey