A subcontractor at the workshop indicated that one of the reasons they accept such contracts is that they do not understand them. Too many subcontractors go to bail out companies because they work at the lowest prices and take risks they don`t understand. To address this problem, the MBAWC has proposed to offer workshops that will help subcontractors better understand their contractual obligations and rights, as recorded in the standard contractual documentation. The contractual and legal committees of MBAWC and MBSA also review all of MBSA`s current contractual documents and, if necessary, make appropriate changes. A large contractor participating in the event reported that in 2019, the main contractors would be in a position as risky as their independent subcontractors. “We all face massive business risks, and we all try to transfer the risk to each other – the client transfers the risk to the primary contractor who transfers it to subcontractors who then try to pass it on to suppliers. It creates divisions in our industry, and it cannot continue. It was proposed to create a forum for major contractors and subcontractors, in which they could not only curb the problems that existed in their relationship, but also redefine their contractual agreements and oppose the status quo. MBAWC will facilitate this forum in the near future. “The subcontractors and the major contractors must jointly oppose the changes to the contractual terms imposed on them,” Said Mr.
Bodill. Master Builders SA has 50 contracts ranging from housing to sub-contracts and housekeepers such as site reports and Variations to Contract. The issue of delay or non-payment of subcontractors by major contractors in the South African construction industry is more common. As a result, subcontractors are currently faced with the dilemma of accepting the work of the principal contractors on offending terms and risking late or non-solvency payments or closing their doors, and subcontractors find that trade is no longer profitable under these conditions. He added that if subcontractors and senior contractors establish better relationships of trust between them, it can only be mutually beneficial. In the event of a contractual dispute, the MBAWC will continue to try to intervene constructively, at the request of its members, in order to reconcile the issue in the interest and satisfaction of principals and subcontractors. “We all need to work together to secure the rights in the standard contractual documents, to protect both primary contractors and subcontractors from the conflicting and costly consequences that all too often result from such trade agreements,” Said Bodill. While some of the problems associated with late payment or non-payment were unpacked at a recent workshop organized by the Master Builders` Association Western Cape on the challenges and risks this entails for subcontractors, it was found that some major contractors were modifying the standard contracts used.