Welcome to "The Subcontractors Blueprint," the essential podcast for construction industry Subcontractors. Join host Jacob Austin, a seasoned Chartered Surveyor with a rich background in industry giants and the founder of QS.Zone. This show is your key to mastering commercial savvy and contract finesse.
Gain the knowledge and skills to manage accounts, understand rights, and boost profitability as an SME sub-contractor. Jacob's expertise guides you through risk management, cashflow maintenance, and maximizing subcontract profitability.
Tune in now to empower your subcontracting journey with "The Subcontractors Blueprint" and take confident strides toward a more prosperous future.
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Are You Prepared for the Financial Impact of Liquidated Damages in Your Contracts?
Monday, September 16, 2024 • Duration 20:32
In episode 60 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone discusses the critical issue of liquidated damages for construction subcontractors. He explains that liquidated damages are pre-agreed financial penalties for project delays, which can significantly impact a subcontractor's finances. Jacob offers practical advice on understanding contracts, securing extensions of time, and documenting delays to mitigate these risks. He emphasises the importance of proactive communication and thorough record-keeping to protect against unexpected liabilities. This episode provides valuable insights to help subcontractors maintain profitability and avoid financial pitfalls in their projects.
KEY TAKEAWAYS:
Definition and explanation of liquidated damages in construction contracts.
Financial impact of liquidated damages on subcontractors.
Distinction between liquidated damages and general damages.
Necessity of thorough documentation of delays and communication with main contractors.
Real-life scenarios illustrating the implications of liquidated damages.
BEST MOMENTS:
"Most standard forms of subcontract don't contain liquidated damages clauses."
"One of the best ways to do this is by securing extensions of time. If the delay isn't your fault, maybe it's down to bad weather, design changes, delays caused by other trades. You need to request an extension of time for that as soon as possible."
"If your delay causes the main contractor to be late, you're not just responsible for the liquidated damages that they owe the employer, but also the contractor's own costs for being on site longer and further costs for dealing with claims from other subcontractors who are impacted by your delay."
"You need records. Records, Records of everything. If another subcontractor is holding you up, you need to document it."
"When it comes to managing the risk of LADs as a subcontractor, that is about the most you can do, barring not working at all - and not making any money, of course."
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
The Blueprint for Successful Pre-Construction Planning for Subcontractors
Monday, September 9, 2024 • Duration 18:04
In episode 59 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone underscores the critical role of pre-construction planning for subcontractors. He covers essential aspects such as contract review, site logistics, resource allocation, setting realistic timelines, effective communication, and risk management. Jacob emphasises that thorough planning can lead to smoother, more profitable projects by mitigating common issues like risks, miscommunication, and delays. His practical advice aims to help subcontractors enhance their project execution and overall business success, making this episode a valuable resource for construction business owners.
KEY TAKEAWAYS:
Importance of pre-construction planning for subcontractors.
Site logistics and organisation for project execution.
Setting realistic timelines and managing deadlines.
Anticipating challenges and mitigating risks.
Proactive approaches to enhance project execution.
BEST MOMENTS:
"Pre-construction planning is all about laying the groundwork for your success. Whether it's reviewing contracts, preparing site logistics, allocating resources, setting realistic time scales, or managing risks, every step you take before the project starts can and will pay off in the long run."
“Every project is different and every contract is different. This isn't just standard paperwork.”
“Misunderstandings about what expected can lead to scope creep and disputes, and you can end up doing more work than you thought you'd agreed to without any additional pay."
"Safety should never be an afterthought, so it needs to be baked into your logistics, planning and of course, your risk assessment and method statements from day one."
"One of the best experiences that I remember having as a contractor involved a glazed petitioning outfit... the foresight of that contractor saved us that logistical challenge."
Link to the episode about checking your contract mentioned in the show:
Apple -
Cash Flow SOS: Saving Subcontractors from Financial Turbulence
Monday, July 8, 2024 • Duration 21:32
In episode 50 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone delves into cash flow challenges faced by subcontractors and offers practical financial management strategies. Joined by a friend who owns a subcontracting firm, they discuss the importance of working with prompt-paying contractors, setting accurate prices, and managing retention. Jacob emphasises the value of setting up separate accounts for taxes and supplier payments to ensure financial stability. The episode provides actionable advice for improving cash flow and profitability, encouraging listeners to adopt these practices to protect your business.
KEY TAKEAWAYS:
Strategies for improving financial management and profitability.
Insights from a subcontracting firm owner on improving cash flow.
Importance of setting up separate accounts for specific financial purposes, proactively setting aside funds for annual expenses and supplier payments.
The importance of getting the price right to maintain not only your margin, but your cashflow too.
A simple and effective method for tracking retentions due and reminding yourself of the facts to collect it.
BEST MOMENTS:
"And then also the likes of your payday lenders and these kind of organisations, they're really capitalising on people's need for money by pushing up their interest rate to some silly percentages. And that feels morally wrong to me. But at the same time, this is just the bank hedging their bets."
"So the first thing that he swears by is working for contractors that will pay him promptly and regularly. And what I mean by that is he's got a short payment period and regular valuations."
"Now, this makes the business not quite self-financing, because he's still got to cover the labour, which he pays on a weekly basis for the period that he's waiting for his first lot of money."
"And the issue is, as much as it was consistent, the inflation that had been consistent alongside it was eroding how much money he was making on every job. So regularly reviewing how much you're making out of your subcontract rates is a vital component of making the right margin on your job."
Is the Future of Main Contracting Putting Subcontractors at Risk?
Monday, July 1, 2024 • Duration 13:51
In episode 49 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone explores the evolving landscape of main contracting and its implications for subcontractors. He differentiates between main contracting and subcontracting, emphasising the shift from traditional models to modern practices that rely heavily on subcontractors. Austin discusses the challenges faced by both main contractors and subcontractors, including reduced risk, lower profit margins, and workforce stability. He highlights the broader industry impacts, such as the sustainability of skilled labor and mentorship for apprentices.
KEY TAKEAWAYS:
Explanation of the differences between main contracting and subcontracting, and the role of principal contractor.
Comparison of the historical and modern roles of main contractors, including labor, divisions, and profitability.
The trend of main contractors reducing risk by subletting to multiple subcontractors.
The impact of industry practices on skilled labor, mentoring, and the need for consistent employment.
Challenges faced by main contractors, including insolvencies, and the impact on subcontractors' workforce and income stability.
BEST MOMENTS:
"Main contracting typically comes from the role of the main contract, as in the document in force between the client and the contractor delivering the work on the client's behalf."
"Main contracting almost was more entrepreneurial previously, because what you would see is that a lot of main contractors had their special civil division, and they had a housebuilding team."
"If people only knew that this is the way that one of the largest industries in the country is operating regularly, I think there'd be a similar load of uproar about it."
"Consistent employment is the only way that we're going to see any kind of rise in the number of skilled operatives coming into the industry."
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
Unlock the Secrets to Timely Payments in Construction!
Monday, June 24, 2024 • Duration 22:19
In episode 48 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone dives into the top ten issues causing late payments for subcontractors in the construction industry. Jacob offers practical advice on timely payment requests, proper invoice formatting, and meeting payment prerequisites. He stresses the importance of clear communication, understanding retentions and discounts, and navigating contract terms. Additionally, Jacob discusses the impact of project changes and the financial stability of main contractors. This episode is packed with insights to help subcontractors enhance cash flow, ensure profitability, and foster business growth.
KEY TAKEAWAYS:
Understanding when to ask for payment.
Knowing correct format for submitting invoices or applications for payment.
Being aware of prerequisites for payment.
Addressing impact of changes, denial of payment, or reduced payment for completed work.
"Late payment to subcontractors continues to be a blight on the industry, and cash needs to change hands really quickly to keep the big old wheels of the industry turning”
"I’ve seen firsthand the devastation that gets left behind when a contractor goes bust partway through a project, leaving someone else to step in and pick up the pieces.”
“If it doesn’t feel right, it probably isn’t right. Protect yourself, protect your livelihood, and the livelihood of all the guys that work for you.”
“You should make it as easy as you possibly can for the contractor to pay you as much money as you ask for."
How Can Subcontractors Ensure Compliance with NEC Obligations?
Monday, June 17, 2024 • Duration 15:42
In episode 47 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone delves into the critical obligations subcontractors must understand under the New Engineering Contract (NEC) to ensure profitability, improve cash flow, and grow their business. Key topics include the early warning clause, the necessity of employing competent personnel, adherence to project scope, compliance with health and safety requirements, and meeting key project milestones. Jacob also covers the importance of timely defect correction, payment submissions, and accurate compensation event assessments.
KEY TAKEAWAYS:
The twelve most important obligations under an NEC subcontract and the contractual ramifications of failing to meet them.
The concept of Key Dates and what happens if you miss them
Non correction of defects may result in the client recovering costs from you, even if they haven’t incurred them.
Submission of an application for payment before each assessment date.
"It is a must that you raise early warnings to avoid the effects of this "you should have told me earlier" clause”
"this is the NEC forcing the discussion, forcing you to raise issues that might turn into problems and get around the table to resolve them.”
“We only got paid a small portion of that boarding work, which was roughly what it would have cost to patch some of the bigger holes.”
"The onus is on you here to give enough information to justify how much you want or how much you need."
Navigating NEC Projects: A Comedy of Mindset Errors
Monday, June 10, 2024 • Duration 15:35
In episode 46 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone explores the mindset shift required when transitioning from JCT to NEC projects. Reflecting on a past project that faced challenges due to the rigid NEC approach, Jacob emphasises the importance of understanding the differences between the two contract types. He highlights the necessity of treating the NEC program as a live document and fostering a collaborative environment. Jacob underscores the significance of open communication, good faith, and mutual trust in NEC contracts. He concludes by encouraging SME contractors to adopt a collaborative mindset and subscribe for further insights and support.
KEY TAKEAWAYS:
The need for a mindset shift when working on an NEC project compared to a JCT job.
Experiences from a large-scale government project, highlighting commercial relationship issues and lack of impartiality.
The NEC contract's focus on project management techniques, obligations expressed through the program, and the live document concept.
The contractual duty for all parties to deal fairly with each other, enforceable clauses, and the importance of trust and cooperation in communication.
"It was the commercial relationship that didn't really embody the spirit of the contract."
"When it turns adversarial, the employer will have no hesitation in turning the timescales against you.”
What Should Subcontractors Watch Out for in Collateral Warranties?
Monday, June 3, 2024 • Duration 18:55
In episode 45 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone provides essential insights on collateral warranties for subcontractors. He stresses the significance of these warranties in establishing a contractual connection between subcontractors and third parties. Jacob advises subcontractors to meticulously examine the terms of collateral warranties, as they may extend liabilities or impose additional insurance requirements. He also warns of the risks tied to novation clauses and the assignment of warranty benefits. Subcontractors are encouraged to consult legal experts to safeguard their rights and interests when dealing with collateral warranties.
KEY TAKEAWAYS:
Understanding the definition and purpose of collateral warranties.
Always read a collateral warranty prior to signing it, as no two warranties are the same.
Clauses that can extend liability, impose insurance obligations, and restrict subcontractor rights.
The risks associated with Novation Clauses, which may help or hinder you depending on how they are set up.
The implications of assigning warranties and clauses which obligate multiple warranties being provided.
BEST MOMENTS:
“So fitness for purpose? Very, very bad. If you see it in a document, you must insist that it is struck out.”
"They don't read like a subcontract and start introducing all manner of rights and obligations, making you liable for elements of your design and sometimes your finished work to a third party that you might never have heard of."
"There have been some colossal hikes in the price of insurances in the last few years, so it's important when you're reading the warranty that where the insurances are mentioned, there is a statement that says as long as that insurance is available at commercially reasonable rates."
"Novation can be a good thing or a bad thing. It depends whether that novation clause contains obligations for the employer to pick up the bill for anything the contractor hasn't paid you."
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
Deciphering Contractual Jargon in Subcontracts - Obligations
Monday, May 27, 2024 • Duration 14:14
In episode 44 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone delves into the subtleties of contractual language, elucidating the legal significance of terms such as "shall," "reasonable endeavours," and "best endeavours," and how they influence contractual obligations. Furthermore, Austin emphasises the crucial importance of design liability limitations, offering guidance to construction business owners on the imperative of delineating these boundaries to ensure adequate insurance coverage for their subcontracting activities.
KEY TAKEAWAYS:
A breakdown of some contractual language surrounding obligations in subcontracting agreements.
The implications of words like "shall," "reasonable endeavours," and "best endeavours" in contractual obligations.
Importance of understanding specific words and phrases in contracts.
Relevance of “best endeavours” to subcontractors operating a JCT subcontract and how to challenge those clauses with contractors.
The importance of limiting design liability to reasonable skill and care.
BEST MOMENTS:
“Shall. This is a direct instruction, an obligation for you to do something. And the ramifications then, if you don't, is that you potentially lose an entitlement.”
"By not submitting a notice, you aren't giving the contractor a heads up and the opportunity to do anything about any potential delay, so then you forego your potential entitlement."
"Without disadvantaging yourself and acting within your means, you're going to try and get something done."
"Right there in the black and white of the standard unamended JCT is a requirement for you to leave no stone unturned to prevent the delay of subcontract works."
Avoiding Site Instruction Destruction: Your Guide to Avoiding the Pitfalls of the Humble Site Instruction
Monday, May 20, 2024 • Duration 18:18
In episode 43 of The Subcontractors Blueprint podcast, Jacob Austin of QS.Zone discusses a crucial lesson about the importance of following on-site instructions. He recounts a story of a subcontractor facing consequences for refusing to execute additional work, leading to project delays and financial loss. Jacob highlights the necessity for subcontractors to understand their obligations and the circumstances under which they can reject instructions. He also explains the process of issuing instructions, both written and verbal, and the significance of documentation. Additionally, Jacob offers insights into the JCT and NEC contracts' procedures for instructions. He concludes by stressing the importance of compliance with on-site instructions to avoid negative outcomes for subcontractors.
KEY TAKEAWAYS:
The importance of following on-site instructions for subcontractors
Potential consequences for subcontractors who do not comply with instructions.
Insights into JCT and NEC contracts and their procedures for issuing instructions.
Subcontractors' obligations and reasons for objecting to instructions.
Concept of reasonable instructions and examples.
BEST MOMENTS:
"Unhappily, in his words, he was being shafted."
“This is where you've got to be incredibly careful, because holding out for agreement on a price or refusing to do something because of you've not been paid the full amount that you thought a previous variation was worth, isn't a valid reason to reject an instruction.”
"This is your warning; if you've already failed to action an instruction and you then receive a seven-day notice telling you to get on with it, if you don’t”…”Then it’s going to start costing you money”
“All of these little bits are extra loss and you could be looking at a fairly hefty bill.”
Unlike JCT.. “There is no procedure under NEC for verbal instructions to be given. So in that instance, if somebody doesn't confirm to you in writing something that they've asked for, then there is no change and there's no compensation event."
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Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
“Some people get a little bit angsty about being overly contractual and oh, I don't like to submit a notice. I don't like to submit an early warning because it's seen by the other party as being aggressive and contractual.”
"Talk to your counterpart in the same way that you would talk to somebody else that you trust and have a frank and honest discussion."
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
Jacob is on a mission to help the 1 million SME contractors working within the construction industry. If you've taken something of value from this episode, please share the podcast with someone you know, and pass the value on.
HOST BIO: Meet Jacob Austin, a Chartered Quantity Surveyor with a rich background at construction industry giants Balfour Beatty, Kier, and Vistry Group. With extensive involvement in education, health, and residential projects spanning various scales, from £1000s to £100M in concurrent developments, Jacob brings a unique perspective. Having collaborated with numerous small businesses, he's now committed to sharing his expertise to drive their success. Join Jacob on his podcast, where he blends his profound insights and personable approach to offer guidance, industry secrets, and inspirational stories.
