The price subcontractors are paying for the Carillion crisis

carillion_blog Zone Manager Delivery Management System

With up to 30,000 SME’s within the Carillion supply chain being at risk of not being paid, it appears that sub-contractors are the ones who will literally pay the price for this crisis sweeping the construction industry.

With a government bailout seemingly out of the question, it appears to be anyone’s guess as to whether current projects will be completed let alone if subcontractors will receive payment.

What is apparent is that there are many questions still to answer and it doesn’t look like subcontractors will necessarily get any answers any time soon. That said, the announcement on Thursday of a government task force being set up may offer a glimmer of hope to thousands of subcontractors.

In addition, it is the negative feelings surrounding Carillion’s demise which runs the risk of casting a shadow over the reputations of sub-contractors.  Amidst the damning reports circulating publicly, those sub-contractors who have had a close alliance with Carillion will understandably be concerned about being tarnished with the same brush.

It’s easy, in the current climate, for onlookers to forget about the whole ream of successful completed projects that many SME’s have been integral to and that the way Carillion conducted their payments is not indicative of their sub-contractors.

As sub-contractors, one of the priorities must surely be to take prompt action to ensure that key staff on projects with vital knowledge are not lost. The same applies for those sub-contractors handling key packages and services integral to the projects.  Without swift and decisive action, it runs the risk of potential new contractors starting from scratch which then has an inevitable knock on effect on schedules and budgets-something they will desperately want to avoid.

It remains for those SME’s affected by this crisis to stand firm with each other, continue to manage their risks well and deliver well to their customers. Despite the heavy bill they will all inevitably burden, there has never been a more opportune time to rally round, respond with great dignity and support each other.