The Specialist Engineering Contractors’ (SEC) Group represents the largest sector in UK construction (by value). The specialist engineering sector mainly comprises SMEs operating as sub-contractors in construction supply chains.
Professor Rudi Klein, CEO of SEC Group commented on the latest news on Interserve:
“At present the outcome of any pre-pack administration insofar as Interserve’s supply chain is concerned remains unclear. But, yet again, the financial models adopted by these large outsourcers pose an ever-present and potentially very damaging risk to their supply chains. Following Carillion’s collapse, it was generally assumed that there would be a radical re-appraisal of the public sector’s approach to construction/infrastructure procurement. This hasn’t happened. Again, we urge the Government to:
- Abandon the policy of letting high value contracts to outsourcers and, instead, break down contracts into smaller lots to facilitate greater SME participation in the procurement process.
- Insist on the use of new model procurement options that foster greater teamworking amongst all those involved in the delivery of construction /infrastructure works.
- Insist on greater payment security for construction supply chains including the use of project bank accounts (ring-fenced bank accounts through which sub-contractors are paid) and/ or direct payment from public sector clients to subcontractors; if used, cash retentions should also be protected.”
Notes for Editors
- SEC Group is an umbrella body representing the largest sector in UK construction (by value). The specialist engineering sector comprises mainly SMEs. SEC Group members are: British Constructional Steelwork Association, Building Engineering Services Association, ECA -Electrotechnical and engineering services trade body, Lift and Escalator Industry Association, SELECT (Electrical Contractors Association of Scotland), SNIPEF (Scottish and Northern Ireland Plumbing Employers’ Federation) and Scaffolding Association.
- Project bank accounts provide a secure “pot” out of which all construction project participants receive their payments; the monies do not have to pass through the hierarchical layers of sub-contracting.
- Peter Aldous MP have put forward the Construction (Retention Deposit Schemes) Bill which asks for cash retentions in the supply chain to be protected.
- For further information please contact Maria Balermpa, SEC Group Operations and Public Affairs Manager on 07508 559 231 (Email: firstname.lastname@example.org)