BUSINESS AND TRAINING 13
Guarantees • Do you have to provide a ‘ performance guarantee ’? ( costs money );
• Do you need to provide an ‘ advance payment guarantee ’ to secure money to pay deposits ? ( possibly to foreign suppliers );
• What are the chances of the employer or the principal contractor providing a payment guarantee to you ?
• If retention applies - at what percentage / when repaid ? How likely is it that the retention will never be paid by the contractor … ?
• An escrow account may solve the repayment of retention but costs money Insurances • Are there any insurance obligations relating to the project – separate from the insurances required to operate your business ? Personality issues Are you aware of any persons / obligations / goods or activities that may cause ‘ personality clashes ’ and / or ‘ disagreements ’?
If personality clashes are likely , don ’ t tender – another project may be a pleasure to work on and earn a profit ;
Dispute resolution What provisions apply should a disagreement / dispute arise – as stipulated in the Standard-form Contract – if modified , beware ! Options should refer to negotiation between the parties , if not successful refer to mediation , if not successful refer to adjudication … avoid arbitration if possible and resist litigation - lengthy and very expensive !
YOU HAVE WON YOUR FIRST TENDER AS AN ELECTRICAL SUBCONTRACTOR – WHAT NOW ?
Administration You have received a notification from the Contractor and / or the Principal Agent or a specialist agent as a phone call and / or an E-mail , or a WhatsApp message … containing a list or requirements to be complied with and forms to be completed contingent on your acceptance – including :
‘ Returnables ’ Confirm your status – to be appointed as a domestic , nominated or selected subcontractor , or even as a direct contractor by the employer . The ‘ letter of acceptance ’ written by the electrical consultant , Contract Administrator or the Contract Manager should confirm that the tendered price is the accepted price , some key dates and contact persons with their details and confirm a time and date to sign the Standard-form ( sub ) Contract and the contract documents that may include the priced Bills of Quantities , drawings , any subcontract design information - if applicable , the health & safety plan , the quality management plan and a preliminary programme . Ensure you are provided with a reference copy of all contract documents within a week !
• Check that the information provided is as specified in the tender documents , that no items have been added , omitted or changed without notification ( this could be fraud !) or if declared , assess the risk to you , for example unilaterally changing the payment conditions , etc
• Submit a draft programme for integration with the works programme ;
• You may request proof of approved building plans and compliance amongst others with the Occupational Health & Safety Act ;
• Confirm that the works have been insured by the employer , or the contractor , and that such insurances include ‘ your ’ subcontract works and insist on a copy of the insurance schedule ;
• Ensure names + ID numbers of your permanent and contract staff working on this project are recorded on the project insurances .
• Confirm that space has been allocated as a site office / workshop / lay down area – and that such facilities , connection to utility services , use of personal hygiene facilities , access and use of temporary works and construction equipment including hoists etc ‘ is suitable ’;
• Clarify site security – and access control for staff and visitors .
• Clarify who has what authority in your team and similarly that of other contractors on site ;
• Agree key dates for submission payment claims , deduction / release of retention ( consider an Escrow account to ‘ manage retention ’);
• Clarify the always contentious matter of ‘ contra charges ’
• Agree key dates for submission of reports , notices , etc
• Agree how to manage ‘ quality ’ assurance , etc
• Agree how to manage ‘ commissioning ’ and certification ;
• Agree how to manage ‘ completion ’, defects liability , warranties ;
• You may have to provide :
○ Business registration certificates including – CIPC , SARS , UIF , bargaining council , etc
○ Personnel names + ID numbers , health , qualifications etc
○ A guarantee for performance ;
• When in doubt – ask ! ( in writing , keep a copy of all correspondence ).
We continue with the second part of this article in May Issue .
EXECUTING YOUR FIRST CONTRACT AS A PLUMBING SUBCONTRACTOR – WHAT ( NOT ) TO DO . PA
“ The devil is in the detail !”
April 2022 Volume 28 I Number 2 www . plumbingafrica . co . za