Build UK ‘disappointed’ to see contractors squeeze supply chains

Build UK has seen “extremely disappointing” evidence that some construction companies are squeezing their supply chains rather than working collaboratively as the industry emerges from the coronavirus lockdown.

In an update issued yesterday, Build UK said that with
everything the industry has been through over the last few months, and with more
uncertainty ahead, the sector’s “long-term resilience depends on working
collaboratively”.

It added: “It is therefore extremely disappointing to
receive evidence that some companies are reverting to bad habits and squeezing
their supply chains, rather than taking the opportunity to revolutionise the
way in which construction projects are delivered.”

Build UK warned firms that their reputation could be damaged
“by not doing the right thing”.

In April this year, Build UK added its support to the Construction Leadership Council’s statement on payment and contracts.

In its statement, the CLC warned that it was “increasingly
concerned about the management of payment in the supply chain, and the risk
that clients and firms will seek to invoke contractual clauses to the detriment
of other firms”.

It highlighted the importance of maintaining cashflow to
ensure the financial health of the industry. The CLC added: “This applies to
all businesses in the sector, including those in the materials and products
distribution supply chain. As a result, every business, large and small, has a
critical role in the making sure that cash continues to flow throughout the
industry. However, our Construction Industry Task Force colleagues have brought
to our attention that there are number of businesses that have chosen to
unilaterally delay payment or extend credit terms. We do not believe this is
acceptable or appropriate – particularly at this time of great stress.”