Education Ministry foisting risk onto builders - industry
The building industry is complaining that Education Ministry contracts are shifting greater risks to builders, even as expensive industry failures are mounting. The contracts have been modified to make main contractors wait twice as long for payment. They can easily find themselves having to pay subcontractors each month before the ministry has paid them. Standard practice for the last 50 years has been to pay them after. The Master Builders Association member and lawyer Matthew Aileone says the contract's wording around extending the payment times is hard to decipher. He told RNZ reporter Phil Pennington that builders have also told him that Corrections Department contracts are difficult. The Education Ministry says it tries to pay all contractors sooner than the contract allows. It expects them to be aware of where to look for modifications to the contract. The Ministry says it made these changes in late 2016 to maintain 'transparency and consistency' after consulting the industry, during which only 11 contractors out of 200 raised issues with the payment clauses.