HAWKINS STRUCTURES REPLIES - When the chain turns sour.. - ROYDEN ENGINEERING REPLIES - ALFRED MCALPINE REPLIES - BILLINGTON STRUCTURES REPLIES

Essentially what Tommy Melling says is correct. His contract went up from œ42,000 to œ72,000 and we have paid all except œ5,000. That means we have paid œ25,000 more, but we have actually only received so far an extra œ11,000 against this work from McAlpine. In all they still owe us around œ180,000 and, of course, we will pay up when we receive some more money. It is all under discussion still and we have got to check who is owed what.

In general we would like to see the end of the 'pay when paid' clause in contracts - that would help. Hawkins Structures did not carry out weekend working on McAlpine's instructions and this is a matter between them and their subcontractor.

Bluebell Architecture have been paid for the work they carried out. Any reduction in their valuation was as a result of invoicing in advance of carrying out the works. In the event they failed to complete the works and McAlpine has had to carry out substantial works directly in order to achieve completion. I have run my own steel erecting business for 30 years and have never known the market to be as bad as it is now. Here is an example of how things go wrong on site in contractual relations today.

There is a problem on site, our foreman rings the client and all we get is 'he's not in' or 'he's in a meeting.' If you do manage to reach the person you want, they say they'll look into it or that they can see the problem and can we put it right. Yes, we say, we can, but what about payment? Don't worry you will get paid, we are told. This is the joke of the century. If you believe it, you will end up out of pocket. I believe trusting assurances like these has cost me œ17,695.

My tale of woe starts in September 1993, when I tendered for three contracts:

1. Student Village, Manchester - 950t for Royden Engineering of Rainford - (œ35,000).

2. Marks & Spencer, Warrington - 670t for Hawkins Structures of Scarborough (œ42,000).

3. Morrisons Supermarket, Warrington - 320t for Billington Structures, Wombwell (œ19,000).

I was awarded all three contracts but was confident I could make them pay even though they were low prices.

However, through late information from architects resulting in late deliveries of steel, things were not going well on all three contracts. I was always told I would be paid extra to contract sums for additional work. Where possible I had time signed for, but at other times when things went wrong I could not obtain a signed time sheet but was always told "don't worry you will be paid"!

This is the subbie's dilemma. Do you wait for the formal go-ahead while costs are mounting for every minute's delay, or do you get on with the work and hope that you are paid properly come the reckoning day?

On the Student Village project in Manchester for Royden Engineering my problems began when I went to the office to collect money and discuss final account for extras to the contract. I calculated that the balance owed was œ9,211.44, but was told I would be paid œ5,014.20. There was no discussion, and although I at first refused to accept it in the end I had to agree.

On the Marks & Spencer project in Warrington for Hawkins Structures my contract grew from œ42,000 to œ72,000 due to weekend working and extra to contract work. All my time was signed for on daywork sheets by their own site agent. I had a shortfall on this contract of œ5,000. I was and am still being told that the main contractor, Alfred McAlpine, are holding œ200,000 back from Hawkins so they are not paying any money out until they are paid.

The Morrison Supermarket job in Warrington was for Billington Structures and now I will not work for them again. We waited from March until July for answers as to why they were not paying certain invoices which are based on claims that I say have been signed for. On three contracts I have erected for this company there is money outstanding totalling œ2,094.51.

On the Marks and Spencer project I took on another contract for a company called Bluebell Architectural who were on site when the main steel was being erected. They approached me and asked if I would price for the erection of the canopy steelwork. I quoted œ4,700 which was accepted and again this contract grew to œ6,403.33 through extras to contract. McAlpine again did not pay, slashing their end of month valuation by œ50,000. Hence Bluebell could not pay me. Unless Bluebell is paid I have very little chance of receiving my money.

The total of my losses mentioned above is œ17,695.

In my opinion the cause of all these problems is:

1. Late information from the architects, resulting in late deliveries of steel and fabrication errors due to drawings not being checked, which is due to understaffing.

2. Management contracts where a number of weeks is allowed for the contract which is called fast-track. There is no allowance for things going wrong. I do not think any contractors on the Marks & Spencer contract made any money and all the ones I spoke to could not wait to finish this particular contract and never again would they work on a management contract site.

The big guns demand progress but won't come through with the money. The small firms at the end of the chain suffer like myself. I will survive as I have put personal money in the firm to keep it afloat.

Steel fabricators take on too much work and then have to sublet it to other fabricators. If steel is not fabricated 'in house,' there is no control over deliveries, ie steel is delivered late or not at all. Royden paid all Mr Melling's contract work before the due date and in most cases between 30 and 45 days against the contracted 60 days. Retention of 5% was 'never' deducted.

Mr Melling was advised by Royden to compile a claim for any extra and this would be pursued with the client and paid on a pay when and if paid basis. The claim was never submitted.

We made a final offer which was, after some discussion, accepted, of œ5891.69 for the outstanding balance.

Mr Melling signed for the cheque on a standard form which stated 'we accept this cheque for the value of œ5891.69 on behalf of TH Melling as full and final settlement for work carried out at: Student Village Manchester'. Royden does not accept that threats were made at this juncture.

The meeting broke up amicably with Mr Melling requesting further work and until last week Mr Melling was still being asked to submit prices by our Sales/Estimating Department. Melling Services started out with a œ19,000 contract. Tommy Melling can himself confirm that he has received œ26,800 less retentions from us. I think you have to read between the lines here. I don't know anyone who gets fully paid for dayworks - signed or otherwise. And Tommy Melling doesn't seem to understand that. He expects everything he puts in just to be paid. We have dealt very fairly with his company and I think he was being a little naive.