Stop 'risk dumping', buyers told

9 April 2008
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10 April 2008

Buyers should stop passing the risks of construction projects onto their suppliers, a subcontractors group has warned.

The Confederation of Construction Specialists (CCS) said some purchasers are drawing up contracts in such a way that the responsibility for problems during projects is passed on to suppliers, "dumping" unnecessary risk on them.

The CCS has warned its members this process could be costing the industry £18 billion a year, with vendors sometimes having to pay for extra work to ensure projects are successful.

John Storr, chairman of the CCS, said suppliers are often their own worst enemy.

"Subcontractors are drawn to contracts like children are drawn to the seductive jingle of an ice-cream van. Even though they know it's bad for them, they can find it hard to reject an order and may enter a project completely exposed to risk. Part of this is because suppliers sometimes avoid negotiation for fear of losing business.

He added: "They have to ignore the value of contracts and be prepared to stand their ground because ultimately risk dumping is no benefit to anyone - even buyers. It means projects can overrun and exceed budget."

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