RACA Journal January 2020 | Page 40

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 www.hvacronline.co.za