In the war zone

After the fourth time of saying "it's a war out there" in less than half an hour Bob Hughes catches himself, stops for a moment and asks: "You won't make this too negative will you?"

Anyone catching the end of the conversation might assume construction sites are bloodied battlefields. But it would be wrong to describe the boss of Chelmsford-based plastering specialist Hughes (Finishings) as negative.

Just 20 minutes before his fourth "it's a war" comment, he says: "The best time in the construction business is now, without a doubt."

Sense of injustice

That's hardly negative. True, Hughes does harbour a sense of injustice common among subcontractors who went through the wringer in the early 1990s. Despite that, at 67 he retains near exhausting boyish enthusiasm, focusing on the future not the past. Insisting on touring the offices, introducing new young staff and pointing out plans for further improvements, his optimism spills over.

After 50 years in the industry, most people would relish retirement and a quiet life. Not Hughes. He cherishes more passionately than ever a vision of building "the number one firm in the business", convinced that times have never been better for well-run specialist contractors.

"The Construction Act, health and safety regulations - which mean directors are held responsible - CSCS cards and getting people properly trained. I love all that, because we have the organising ability here. But that means you carry an overhead, so we can never be cheaper than firms operating out of the garden shed that just shove men on site," says Hughes.

However, the pendulum is swinging in favour of professionally run specialist firms, he says, with the industry looking more at quality and value as opposed to just price. But his optimism is tempered by serious reservations.

"It's a war out there," he says. "Luckily we've got the Construction Act. If we didn't we would not be in business today."

Hughes was a victim, along with most of his competitors, of the subbie-bashing heyday of the early 1990s, and re-emerged in 1996 to focus on spec housing, leaving behind the roots of contract work on commercial projects.

"We found trading conditions so difficult that we either packed it in or moved into spec housing. Spec housing is why we're here now," he says.

Today the company employs more than 100 people and Hughes is keen to take on big commercial contracts again.

"We have the expertise, but it is frightening. To go back into it will put the company at risk, unless you can build trust with contractors.

"Partnering? We don't see it. If we were to get into it there would have to be a big element of trust on both sides. There is no point in us pricing a job and finding better ways of working if the contractor just turns around afterwards and puts it out to the cheapest bidder."

The trouble is, he says: "Between us and the client is a main contractor mucking about with the money. A lot of the time he's won the job at low or zero margins. He has to make the money somehow and most of the time it's off subcontractors. When we work for a housebuilder, it is the developer. There's no one in between."

Having built a client base of housebuilders he trusts and respects, Hughes has been dipping a toe in the water of subcontracting, working on major residential schemes. Sadly, to date, his experiences reconfirm rather than dispel his concerns.

The days of crude subbie-bashing may have gone with the passing of the Construction Act, he says. But lurking beneath the surface, a hard crust of contracts managers remains prepared to screw subcontractors into the ground given half a chance.

"The same people are still there that were screwing us in the early 1990s," says Hughes. "I don't see things really changing until they are out of the industry. Young people coming in have got to change the culture."

Today, while the Construction Act provides protection, subtler forms of subbie-shafting prevail (see box), leading Hughes to say: "If you don't operate in a professional manner and have top-notch legal assistance you'll come out with no boots on your feet.

"It's no good just being able to do your trade and produce quality workmanship, the paperwork and administration, site supervision and labour management have all got to be meticulous.

"You've got to be meticulous, because the managers on site often don't know what they're doing. They get in a pickle and then try to blame everyone but themselves.

"They are trying to work to schedules and budgets they can't meet. Then they wonder why things go wrong. I am all for fast-track jobs, but you have to have fast-track managers."

He runs through paperwork on two contracts to prove the point. The two case studies have one thing in common - the contractors appear to have tested the paperwork and administration of Hughes to the limit.

But it is not just the paperwork that is being tested, he says. Hughes describes how one site manager explicitly said: "I haven't finished testing you yet." He elaborates, cautiously, saying: "Let's just say he didn't want us on the site, there was another firm he preferred. If we didn't perform, we'd be off and it would be on."

Reading between the lines, he suggests that there are contract managers prepared to deliberately undermine the work of subcontractors to get their own way, even to the detriment of the job, their employer and the client.

His biggest bugbear, though, is poor schedules. According to Hughes, contract managers earn a lot of their salaries from bonuses - say 40% - so they are determined to meet targets. As a result, the job goes out of sequence.

"We had one job where we started on more than 100 units and less than 10 on the whole project had been handed over, just so managers could meet their year-end targets.

"That's madness and is no way to work. Everything is out of sequence and you end up doing things in bits and pieces rather than in a proper order," he says.

"It's chaos. The key to any contract is how you schedule your labour, but you can't do it properly because the contracts manager is in a panic."

The cost of chaos

Hughes believes it adds at least 25% to overall costs. "I read about the bosses of major contractors wanting better relationships with their subcontractors. They probably do, but they're not looking at what's happening on their sites. If managers are paid big bonuses to meet budgets and schedules they don't have the ability to meet, then there are going to be wars on sites.

"You don't hear about managers getting big bonuses for good health and safety, for good relations with subcontractors, for doing work in a sensible sequence and a proper manner. If that happened, perhaps things would be better," says Hughes. "If we didn't have good relations with directors at these companies, things would be impossible."

About 15 minutes into this interview, Hughes receives a call from a director of a main contractor. He smiles knowingly and takes a golden opportunity to underscore points he earlier. He puts the phone down and says: "See?"

The director may have been bemused to find himself in a longer than expected conversation about service and standards, reputation, scheduling labour, buying on value and not lowest price, but the point was made.

And that point is, that unless managers at all levels in main contractors build trust with their subcontractors and trade contractors, the industry will remain at war and there will be less money for everyone. n