Associations
SARACCA TAKES
PAYMENT ISSUES COUNTRYWIDE
By Barney Richardson
SARACCA held its branch meeting in Johannesburg, Cape Town and
Durban to really look into the payment issues.
T
he SARACCA KZN branch meeting held at the Mount
Edgecombe Estate was addressed by Ross Stembridge of the
KZN Master Builders Association. The meeting fell into a round
table discussion on the problems with payment.
Ross emphasised that subcontractors should manage
their part of a project carefully and be sure of their rights and
Francois Spies from MBA North, was the keynote speaker of the
Johannesburg meeting.
SARACCA Johannesburg new members from left, Farai Cifikopfa
from Global Spek Supplies, Leon Nyamhunga from Fumani
Holdings, Michael Nyathi from Sithocon, and Menzi Mathe from
ColdPoint Aircon Services.
38
RACA Journal I January 2020
obligations under the JBCC Nominated/ Selected Subcontract
agreement. There are many places in the agreement where
the subcontractor must inform or presume notification
to the contractor of such things as delays, requirement
of information and where the builder has failed to do
something as per an agreed programme. There would also be
a notification to the contractor to make payment within the
timeframe of the contract agreement. Notifications must be in
writing to ensure proper communication between the parties
and efficient management and operation of the contract
requirements.
It was suggested that the old guide notes and model letters
and notices from 2006 be reviewed and updated to the JBCC
edition 6.2 agreements.
The branch meeting in the Western Cape held at the Royal
Cape Yacht Club was privileged to have the Master Builders
Association executive director, Allen Bodill address the meeting.
The discussion raised the issue of providing security in the
form of a Contract Guarantee. In many cases the building
contractor wants to hold retention which is contrary to what
the subcontractor selected in the form of tender. This becomes
a serious issue when it comes to the end of the contract. The
imposition of new conditions at the award of the contract
constitutes a new offer and the subcontractor can revise his
tender bid with a counteroffer.
The payments process was described; from the initial claim
from the subcontractor through to the claim submitted to the
client’s agent. A payment certificate is then issued by the agent
which might have been confirmed by the consulting engineer.
This should include the amount due to the subcontractor.
A payment advice must now be issued to the subcontractor
and payment should be made within 21 days of the Payment
Certificate. This does not always happen.
The discussion reverted to the same points raised in the
KZN meeting regarding proper communication between
the parties of the contract, and efficient management and
operation of the contract requirements. Allen Bodill pointed
out that the problems with payment are not unique to the air
conditioning industry but are experienced across the broader
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