LETTER TO THE EDITOR

Vuk’uphile exposé highlights how managing consultants run small contractors out of business

By Daily Maverick Reader 2 August 2018

I have noted the sad misuse of power and the unfair manner in which performance is assessed and invoices rejected for petty/immaterial reasons which retard growth and development of small contractors in the construction sector. By Mxolisi Maome.

I read with interest the article in Daily Maverick by AmaBhungane on the challenges to the Vuk’uphile programme. Profound and telling. It is more the mismanagement of the programme and misuse of bargaining power by employers and consultants. The essence the article exposes the challenges faced by small contractors in the construction sector across the country, may I say.

It is common for the managing consultants such as those mentioned in the article to run the small contractors out of business. It must be remembered that these contractors cannot afford resources like contract managers, finance managers, quantity surveyors and or legal advisers to guide and formulate claims and defend spurious claims, or challenge the employer of the professional service provider.

I have noted the sad misuse of power and the unfair manner in which performance is assessed and invoices rejected for petty/immaterial reasons which retard growth and development of these small contractors.

We have in our firm assisted some contractors but the problem is systematic and needs to be addressed at both government and Construction Industry Development Board (CIDB) level. Most genuine claims by small contractors are refused or rejected not on merit but technicalities; the shortcomings of the professional services provider or the employer is shifted to the small contractor and project risk such as community uprisings in demand for employment are carried by the small contractor.

As a solution we have advocated that CIDB and National Department of Public Works must have a different contractual management regime for small contractors, provide clear terms of reference for these consultants that manage projects where there is a developmental programme and use of small contractors. It cannot be that a Grade 4 is managed as a Grade 9. In fact these consultants are very reluctant to reject claims by big companies knowing that the decision will be challenged and taken through the legal process – adjudication, arbitration or even litigation. Most small contractors cannot afford the resources (time and cost) to pursue these avenues including future loss of business.

Other challenges include the late or non-payment of invoices, reducing such invoices over merit and demand for huge insurances.

We have advised contractors to ensure that claim and notifications are issued however flawed but they be filed immediately just to counter the misuse of technicality of “late submission” and time “barred claim” etc.

We hope the exposure of these challenges will assist all in other provinces such as the Eastern Cape, KwaZulu-Natal etc.

This was a very educative and “lesson learnt” article that can be used by stakeholders in the construction sector. DM

Mxolisi Maome is an attorney of the High Court and a founding director of a niche consulting law firm focusing on commercial and construction law practice. He worked over the years at Department Trade and Industry, Eskom, Siemens and other entities including as at present at a development institution.

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