Category: Ansell Murray Limited

Ansell Murray Limited Commercial Support

In the previous post we reviewed the outline of how the construction industry in the United Kingdom treats Sub Contractors and Sub-Sub Contractors. In this post we will examine how the little guy can strike back by just using the available rules, regulations and legislation together with their own Sub contracted commercial support.

Ansell Murray Limited as a boutique Consultancy is able to offer commercial advice and support at any time of the life cycle of the works as well as, as much or little support as is required. A new company may need robust systems to capture what they are doing and more mature business may be expanding on taking on works where not only the contract to be entered into is more complex and onerous but may require more compliance.

In the following sections we will set out typical functions that can be undertaken.

Pre Contract Advice / Support

As the title implies these are activities that take place prior to a contract being awarded and can even be in support of a tender and include:

  • Build up of “Actual Cost” rates for Labour, Plant and Materials
  • Preliminaries Build up and Requirements
  • Estimating
  • Review of proposed form and contract and schedule of amendments
  • Design implications (Professional Indemnity & Warranty requirements)
  • Condition Precedents and their potential Implications
  • Main Contract programme requirements and support
  • Notice Service requirements
  • Specific recurring requirements of the contract

Of course nothing is going to stop “subby bashing,” however the risk of payment problems can also be reduced by ensuring that a fair contract and contract procedures are in place.

Ideally, you should incorporate your own Terms & Conditions of business into any order which can be done by careful submission prior to commencing work, making the last document on file the contract.  If this is achieved it can only be trumped by the later signing of a formal contract, which does not have to be done before payment is to be made, such malpractice is outlawed by the Construction Acts.

Ansell Murray Limited are well placed to assist in this key pre contract activity to ensure many of the terms in the contract cannot be turned into disastrous “subby bashing” tools.

Contract period Advice / Support

During the period of construction works the works can either run smoothly with little or no real change in what has been contracted for and at the other extreme can be delayed and disrupted, subject to dispute. Ansell Murray Limited to provide commercial and project management support at both ends of the spectrum as well as the eventualities in between.

  • Application for Payment support, including dealing with all contractual reporting requirements
  • Management of Change Control, be these Variations or Compensation Events
  • Payless Notice support
  • Robust support of Variation / Compensation Event entitlements
  • Robust support against Contra Charges for additional contractor labour
  • Claim of Compensation and associated interest for Late Payment
  • Invoicing and Payroll (Employee’s and Sub Contractors)
  • Management of supply chain commercially, including ensuring back to back contract provisions and reporting to the supply chain
  • Notice service requirements
  • Insurance liability
  • Programme management, including period updates

In the event Ansell Murray Limited had been utilised during the Pre-Contract phase our primary objectives are to ensure the following are as favourable as possible to the Sub Contractor:

  • Onerous payment periods and lengthy due dates are removed and are at worst in line with legislation defaults
  • Retention, Liquidated and Ascertained Damages, Main Contractor Discount advice and support
  • Letters of intent where issued and being subject to Contract
  • Condition precedents (Extension of Time, Loss & Expense entitlements and Practical Completion)
  • Unrealistic programmes, time requirements & time essence clauses
  • Ensure “Pay when paid” or “Pay when certified” clauses are removed and are in line with current legislation
  • Termination and Suspension rights
  • Set off clauses are removed
  • Onerous adjudication clauses are removed and are in line with The Scheme for Construction Contracts.
  • Insolvency of the Employer and or Contractor advise and support

During the construction phase there is often a false belief that there is nothing that can be done about Contractors entering into contracts and then ignoring them, to the detriment of the Sub Contractor undertaking the work.

Because in large organisations people effectively learn how to mechanically undertake their day to day job, many do not understand their duties and obligations under the contract that they are effectively administrating. In effect the rules that protects a Sub Contractor from bad practices

Often the paying parties do not understand the Payment Notice requirements and that their timing and content are critical. As well as this they fail to recognise the power of payment applications becoming the sum due where the rules of assessment and certification are not followed. In effect your payment application becomes the sum due. If the paying party wants to contest this it must prove its case in later proceedings, which if made up and is not supported by contemporaneous evidence will be impossible.

Post Contract Advice / Support

Often a Sub Contractor may provide the works in accordance with the contract, yet the Contractor regularly and consistently under values your works. This is often a precursor to a robust Final Account negotiation where the Contractors seeks to maintain his margin on the project by using your monies. The larger the amount due as a Final Account settlement and the more chance the Contractor will use delay tactics to try and struck the best deal for the Contractor, often to the detriment of the Sub Contractor.

And what can you do? Your works are complete, often you will have made all the payments due to your supply chain, but you need the cash flow to fund the next project.

Contractors know this and will then use this to drive down the agreed final value.

But it does not need to be like this. Ansell Murray Limited can be engaged at Final Account stage purely to ensure that you are paid what you are owed together with any agreement on the amounts of effective free money you want to give the contractor.

This should only be necessary where the objectives are clear that the Contractor is seeking a significant reduction in the final cost he will pay. For the sake of the industry as a whole these companies should be challenged to stop their behaviour for the greater good of all Tier 2 / 3 contractors.

By engaging Ansell Murray Limited during the construction phase our clear objectives are to ensure the value that has been earned by your efforts on site are paid in that period and in effect to make the final account negotiation about the final 5% of the contract value.

Claims & Dispute Advice / Support

Sometimes contracts simply do not happen as planned and if you are the innocent party and have suffered loss the contract between the parties will allow you to be compensated for this. Ansell Murray Limited can provide assistance in setting out contractual claims generally around Loss & Expense and Extension of Time claims.

The United Kingdom construction industry offers its customers great flexibility. Many construction project are not fully designed when they commence and can progress with the design continuing in the background. This means changes in scope are inevitable and change means a revision in price being charged to the Employer and usually the programme. In this environment disputes are ordinary and common place, so too is a settlement that both parties can accept. However this is often dependent on robustness of the change and associated detail in the pricing and impact on the programme that is put forward. If this is not efficiently managed it reduces itself and the project to conflict which can affect overall quality, time and health & safety. Ansell Murray Limited can manage and handle these claim processes to ensure they do not result in a larger dispute. This is not limited to large scale industrial and commercial construction and civil engineering but can be something as small as a fit out of a local shop.

However sometimes the claim ends up as a dispute where both parties believe their stance is correct and the only method to resolve the claim will be through Alternative Dispute Resolution (ADR) as usually the legal option in the Technology and Construction Court (TCC) is prohibitively expensive.

On 1st May 1998 the construction industry took a great stride into the future with the introduction of a statutory right to have a dispute determined by Adjudication. In the subsequent 19 years this process has become entrenched as a relatively cost effective way of having a dispute determined in 28 days. It is a decision which is further binding and can only be overturned, revised or confirmed in Arbitration (if the contract contains an Arbitration clause) or in litigation. Please see previous posts in relation to the mechanism of Adjudication at this link: https://ansellmurray.wordpress.com/tag/adjudication/

Ansell Murray Limited offers support in Adjudication whether you are the party commencing Adjudication [The Referring Party) or to assist in defending where you have been referred to Adjudication (The Responding Party).

Can a party commence its own Adjudication without using a company such as Ansell Murray Limited? The short answer is “Yes” and the slightly longer answer is “It’s not advisable.”

An Adjudication is an argument giving each party a reasonable opportunity of putting his case forward and rebutting the case put by the other party to the contract, with the watchword being fairness.

Why is “It’s not advisable?”

The Adjudicator does not make a case for either party or find the evidence to undermine a party’s case. The role is purely to make a Determination based on facts, evidence, rights and duties in the contract and at law. If an adjudicator investigates at all, it will be to clarify points of fact or law in the party’s case. Therefore it is vital that in preparation of a Referral Notice as the party commencing an Adjudication or in the Response where contesting that the facts are laid out clearly and concisely for the Adjudicator, even where appropriate using legal precedent as a justification of an argument. In reality where there are no legal complexities to be considered the Adjudicator will have little time to do much more than simply make his Determination based on the written arguments of each side.

Of course this entire process is not one-sided and only requires a specialist consultancy such as Ansell Murray Limited. As the real strength (or weakness) of a case for a simple claim or even Adjudication is based on the golden rule or “Records, Records, Records.” These records are your evidence to prove your claim or to disprove a claim made against you. For a claim to be successful it demands good evidence.

Systematic keeping of all site correspondence, instructions, meeting minutes, record photographs (which with modern technology are date stamped), correspondence in writing and electronic mails, site diaries and site resource record sheets. This is also easily verified by the use of technology such as biometric scanners. These are the types of records that help back up a successful claim.

As stated at the start of this post, as a boutique consultancy, Ansell Murray Limited can be your Estimator, Surveyor, Programme Manager, Project Manager, Commercial Manager or Commercial Director. The name on the badge may be slightly different to your organisations name, but we are there to integrate as much or as little into your organisation as you want.

Go to www.ansellmurray.com to view our website and make contact.

Just trying to make a difference

This article was written by Stuart Arderne, like me an Old Selbornian. There is something about the school and the philosophies it instilled in us for life because I associate with all the comments in this article.  I hardly knew Stuart at school, we were in different classes taking different subject and only really got to know about him through my brother when they were Articled Clerks together. However having re-acquainted at a school reunion in 2008 I wished I had got to know him a bit bitter when we were younger, because he is the person he portrays in this article.

The comments made about the general business world are generalisations, but sadly everything is becoming so generalised in life that individuality is dying out. Nothing is judged on its merits and benefit to society; they are judged on as Stuart writes intangible factors and effective greed. Its sad. The article is also two parts as the second part is effectively a business plan to stand out from the crowd of generalised business support. Its where I pitch myself, just not as a Financial Director but more broad commercial support. I wish Stuart well in this venture.

Have a read of this article its fascinating and depressing at the same time, because its true.

I was brought up with old school values, attended a traditional, old school that entrenched those and surround myself with friends that subscribe to a similar philosophy. I believe in respect and dignity, and that no person is better than someone else, because of their station in life or material possessions. Every person is fighting their own struggles and their own demons…. I believe we should go through life touching other people’s lives and making every attempt we can to enrich and make their lives just that little bit better than it was before they knew us, even if that is done by something as simple as eliciting a smile. These are valuable life lessons my father taught me, my school taught me, and a few key business people I have met through my life’s journey thus far.

Sadly, though, this does not appear to be a sentiment commonly share by the business community today. Don’t get me wrong, I intend this as a very broad generalisation –  there are any number of good honorable businessmen out there still, but I believe these principles are being pressured and reassessed on a daily basis in order to survive, and if at possible, to thrive. Business has become about operating in the grey areas, no longer about black and white, right or wrong. A reflection of societies overarching moral decay? It seems that there is almost an underlying unwritten maxim that in order to succeed one should screw one’s customers wherever possible, screw one’s staff as best you can with inane and unbelievable hard luck stories and screw your suppliers the hardest of all.

How did we get here? When did the values of common decency take a back seat to a quick buck? When did the compassion and caring for a small business owners ability to put food on his children’s table get superseded by the need for another luxury car, or third holiday home? When did we allow cold hard numbers to replace the founding tenet of business, which was developing a trusting and long term relationship? In fact, who really cares when it went wrong, should the better question not be what can we do to make things happen the right way again? To me it all revolves around a single word: respect.

As noted above, I have met some business leaders that have shaped my commercial leanings and philosophies over my career, some in a positive way, some as an example of how I’d prefer not to do things. One of the most positive anecdotes I regularly refer back to is a gentleman who is sadly no longer with us, Mr Ian Lloyd, a businessman from Port Alfred. We regularly had golf afternoons with local businessmen while I was at Fish River Sun, and at one such event, I was teamed up with Ian, a good golfer and for some time a very senior leader of the Royal Port Alfred Golf Club. We got to talking about precisely this business ethics topic, as I had observed him invest substantial money in a venture based on a handshake agreement with our general manager, Melville Vogel, and me. My question went something along the lines of “This is a truly rare thing to observe, in today’s world, no one takes things on face value anymore, are you sure you want to invest all this money without a signed contract?”

His answer has stayed with me for almost 20 years. He said “My boy, listen to an old man. There are two ways to do business in this world. The first way is you screw over everyone in your path, step on one back to get to the next one. Make no mistake, you’ll make a lot of money, and quite quickly too. But it will be lonely, and you will stand to lose everything you’ve got, just as fast as you got it. The second way takes a lot more time. You develop relationships, you treat people with respect and trust, choose who you associate yourself with, and you’ll be just as successful, if not more. The difference is no one will begrudge you your success and you will keep it forever. I have chosen to do business with Melville and you because you are gentlemen, men of honor and integrity. I believe I can trust you, so a handshake is all I need.” I hope that message is as powerful for you, the reader, as it always has been for me.

The second observation I wanted to note came from the same era. At the time, the observation stung and I strongly disagreed, but in hindsight, it is wholly accurate, and the sum of my experiences has shown me over and over again that it is both a valid and frighteningly regular occurrence! At a financial review, our Regional General Manager, Mr. Graham Vass, once remarked that the best way to completely f… up a business was to let the accountants run it. As a newly qualified, 25 year old chartered accountant, this was a rather painful slight that I took very personally. But…. Having now spent a good 21 years in various senior financial positions across a vast bouquet of industries, owned and run by local shareholders as well as international corporates, I must accede that he was absolutely right! And I think that this is where the things going wrong I alluded to at the beginning of this diatribe started to occur.

Gone are the days of total understanding of a business, how it works and fits together as an integrated organism, both in its own right as a system unto itself, as well as how it feeds into and feeds off the environment and macro world it operates and interacts with. Gone are the days when an entrepreneur went to the bank with an idea, a passion and a dream and a relentless thirst for success, but nary two bronze coins to rub together, and the bank manager granted a start-up loan or overdraft because he believed success was a real possibility.

These days the private equity investor expects the profits to be at x value by year five so the exit strategy can be executed through sale or IPO, and heaven help management if this isn’t achieved. So management cuts the bottom out of costs, burns out the staff, ruins relationships with suppliers to make these targets – yes, they succeed, they earn big bonuses on that achievement, and exit the business, leaving a shell of its former self, with very little sustainability without fundamental and massive re-engineering and restructuring required. Direct link to the Generation Y and Millennial life philosophy of instant gratification……

These days no bank will even engage in a discussion for funding if the credit score doesn’t come out above predefined sub minimums. And that’s when the quest for numerical proof of value of the idea only begins! So, the reality that prevails is that I need money to create something, I approach a bank for assistance and they won’t loan me the required funding because I don’t have enough money. Logical? And then we wonder why our GDP growth is stagnant and unemployment is rife… The truth is that business is risky, as is life. By all means manage risk, but don’t seek to eliminate it or you will also eliminate entrepreneurial drive.

Everything is done solely on a number, what is finite, what is numerically quantifiable and very little else. Business and the underlying human relationship element has substantially died. It’s lost its soul. I find it really sad.

Which brings me to the primary reason of why I embarked on penning this piece.

The world is full of people who complain about what is wrong, but not enough people who try to make it right. My entire outlook on life, be it personal, business, self, is of positivity. I don’t know how to hate someone or something, I don’t hold grudges, I am exceedingly understanding of situations and always will do my very best to provide a balanced, rational and thought through perspective to things. I believe in honor, fairness and integrity, both in myself and in my way of dealing with others, and this premise does not change whether I stand to gain anything out of my interaction with that person or not. However, life is not fair, so I don’t always experience the same treatment in return. So be it, I will not allow it to jade who I am.

This poses an interesting dilemma…. How does a chartered accountant, a person who is driven by numbers at his very core of training, reconcile with the personal values noted above? A truly dichotomous conflict? For me, it’s a lot simpler than one would think. I have never considered myself to be a true “accountant” personality, I have a diversity of interests and ways of thinking, I have a creative side, having studied art and music, offsetting the logical side from my accounting training, I love the interactions and engagements with people that the hospitality industry afforded me, I have played sport as both a team member and as an individual athlete. And I have a wicked and downright irreverent sense of humour that allows me to engage with people of all walks of life very easily. I believe that I have fundamental flaws as do all of us, but I recognize and accept my downfalls and limitations, and work around these, never afraid to acknowledge that which I don’t know and ask for help.

Through thinking all of this through, I decided to try to make a difference, to try to be different. I want to create an environment of old school business values, and try to associate myself with those of a similar ilk. I have spent time dealing with recruiters trying to secure a new permanent corporate role and came to the realization that even an industry like that, one that has at its very heart and essence the most base of human existence viz. people, relationships and their career aspirations. Even this has fundamentally lost its most important tool of trade: talking to the people that drive their livelihood. Again, that’s a generalisation, as there are a few good people out there that still do things the “right” way, but they don’t get the high volumes of engagements that the bigger, faceless entities do, because the numbers are needed for group deals. Goes back to the premise noted above, if the numbers aren’t right, the small guy suffers, the guy that actually does things right.

And this is where my new venture arises, Integrated Advantage Management Services. The premise and business model of this is simple – I have a wealth of experience across a range of industries, and without in any way intending to appear conceited, I am very good at what I do. I’d like to offer that insight, cross functional knowledge and very different way of thinking to small and medium businesses to help them expand and grow to the next level. Basically offer the knowledge and experience of a corporate level financial director or chief financial officer on a specific engagement, contract or needs basis, rather than having to carry exorbitant costs disproportionate to the size of the business. If there is a need for a retainer type arrangement this is also available, and may allow for me to expand my vision and employ additional staff to assist me.

The obvious question that begs to be answered is how this is different to the plethora of other part time FD or contract accountant or business advisory offerings out there?

My differentiator, my USP if you will is that it’s all in the relationships and my network…. In my 21 years of management experience, I have developed numerous business contacts who I can proudly call friends, a lot of whom are small businessmen themselves. They have years and years of experience across a wide range of business arenas: IT specialists, programmers, insurers, human resources, industrial relations, health and safety, media and branding, accountants, attorneys, security experts, business analysts, cost control specialists, etc

My concept is to provide the best possible financial management and business advice to my clients, and, where there is a need for assistance outside of my area of specialization, referral to one of these business owners. In return, they will refer their clients to me for any advice required outside of their specific areas of expertise. A form of loose syndication…

The benefit is that these contacts are spread all around the country, so it offers a national coverage or referral network. A small business in Port Elizabeth, for example, would have easy access to not only financial and business management advice from a Johannesburg level CFO but also a national level industrial relations specialist. Furthermore, as a grouping we assist small and medium businesses to prosper and grow, while supporting other smaller business owners to do the same. We have all known for some time that the future of the country’s economy is in the SMME area, yet most small businesses have been focused on stealing business from one another, or setting up outsourcing rather than organically growing their own businesses. This doesn’t add any jobs, all it does is reduce corporate cost bases and bleed already struggling entry level and unskilled workers more. This is the real reason behind #feesmustfall, #outsourcingmustfall and related protests – our youth are frustrated because there simply aren’t opportunities out there, even if they have a university degree. So they spend three years at university, build up massive student debt, and then can’t find a job in order to be able to pay this back. By focusing on our model, we, as a grouping, can make very real contribution towards reducing unemployment by not only offering additional roles, but by engendering a way of thinking that may kickstart future entrepreneurs.

Who knows how successful it may be? Maybe it will remain an after hours dream, maybe it will become a multinational. But if we don’t do anything, we know absolutely nothing will happen.

The business proposition document detailing services will be completed shortly, the website and Facebook pages are currently being designed so watch this space. I would love to hear your comments or view on these thoughts, please note on the article or send me a message. For any of my contacts who would like to be part of this syndication, please contact me and let’s make something special happen.

Welcome to the Ansell Murray Limited blog

Ansell Murray is a business services company encompassing a wide range of business services that are tailored to suit the needs of our clients. Your business problem will be unique to your company and your industry, we ensure our solutions take into account how you operate, where you operate and what your company needs to be successful.

Our approach is to be innovative and flexible to ensure the result is what the client is looking to achieve and make the relationship not a short term commission, but a long term first port of call for a solution to a business driven problem. This is achieved by being a proactive consulting company.

Our core values of integrity, honesty & responsibility are reflected in each and every project that we undertake.

We are a versatile, forward thinking company and can perform a variety of business services including:

  • Construction Consultants
  • Corporate Services
  • Dispute Management
  • Management Consulting
  • Project Management
  • Specialist Recruitment

Think of us as your one stop consultancy, with a single point of contact to take your business problem and its solution from discovery to a bespoke solution.

In short Ansell Murray is a complete support function for your business needs and requirements.

Web: http://www.ansellmurray.com

E-mail: inbox@ansellmurray.com

Twitter: @ansellmurrayltd

Skype: ansellmurrayltd

Please check back soon for new blog posts