On Tuesday the 25th of May, the Building and Construction Industry Security of Payment Bill 2021 was introduced to the Western Australian Government.
The bill aims to improve the security of payment across the Western Australian building and construction industry. The Bill introduces a mandatory retention trust scheme to protect subcontractors’ retention money from being misappropriated or lost altogether in insolvency at each level of the contracting chain.
The most notable part of the bill is that it provides an effective, rapid dispute resolution process to speed up the receipt of outstanding payments. This includes provisions for minimum monthly progress payments, to ensure subcontractors are not left with large outstanding invoices.
The Bill will also address registered building contractors with a history of ripping off subcontractors or who engage in ‘phoenixing’ activity and will see these unscrupulous operators removed from the industry.
Risk concerns, tight margins and rising costs
Whilst the bill is put forward into parliament, self-perform and subcontractors are still bearing the majority of the risks on projects. As subcontractors take on over 90% of work on projects a lot of the pressures of project performance falls on their shoulders. Additionally, the skilled labour shortage, rising equipment and material costs, a competitive landscape, and tightening compliance requirements have driven even more complexity in construction operations. These are just a few of the factors creating massive bottlenecks for contractors, minimising margins even further, and costing the industry billions each year.
Additionally, Whirlwind Steel found that a quarter of projects grow past the scope of work by 30% in the field itself. The inability to properly communicate, approve and document the variation of work in the field fuels an endless cycle of disputes for the contractors, ultimately wasting time and money, and leading to delayed payment and cash flow challenges. With the global average length of construction disputes sitting at a staggering 17 months, subcontractors and self-perform GCs assume vast amounts of risk with every project.
Protect your business
As the WA Government makes steps towards better protecting contractors from delayed payments and disputes, contractors too can protect their business through:
- Collecting their field data such as timesheets and dockets in real-time
- Submitting site/job photos with safety forms such as pre-starts, SWMS and JSAs
- Align activities against cost codes digitally
- Keep a meticulous audit trail of project information and amendments
- Create detailed reports into their workforce and assets to see the opportunities for resource maximisation
Assignar is a cloud-based construction operations software built to help self-perform contractors and subs improve productivity, profitability, safety, and quality in the field and office. Assignar’s platform upgrades key components of operations: labour and equipment management, scheduling, field data, timesheets, and more. Learn more about Assignar. Take our 7-minute video tour and learn how Assignar helps contractors operate better.