Robert Merry, is an independent stone consultant and project manager who ran his own company for 17 years. He also acts as an expert witness. Here he presents his view of the stone industry this month.

So let’s pretend you are excited by the news that your company has been invited to attend the pre-order site meeting, where they are also interviewing two other sub-contractors bidding for the stone package. You are down to the last three with the very real prospect of winning the job.

There’s been a lot of toing and froing over specification and the pricing of alternative stones to those specified in an attempt to value engineer the project. Likely the client has decided the development costs can be reduced even further and in these strained economic times everyone down the supply chain can be squeezed a little bit harder to give even more for even less.

It’s a good model on paper. Alternative product… same specification… half the price.

What’s not to like? Bring on the value engineers!

Ah, but as we all know with stone it might look the same(ish) and smell the same(ish), but it’s not actually the same – is it?

Bring on CE Marking!

Back to the pre-order meeting. The final item on the agenda is payment. “You’re happy to accept our 120 day payment terms? Yes?”

“Pardon?”

“You’ve read the contract and understand we pay 120 days after the valuation date?”

There could be two answers to this question:

1. Yes I have read the contract and I am willing to accept your terms and conditions and will now lie down here and ask you to stand on my neck for as long as it suits you, avoiding killing me, as, of course, I would be no use to you if I actually suffocated to death here and now – leave that until the final payment, heh?

2. No I haven’t read the contract. That’s complete and utter exploitation of my company and outrageous – where’s the exit?

But now there’s a third way.

Carillion, as you’ve probably heard, has a new scheme called the Early Payment Facility (EPF).

It’s brilliant. Carillion is proposing to introduce 120 day payment terms to its contracts.

That’s right: They won’t pay you for four months after valuation date. That’s possibly five months after you actually did some of the work.

This means they don’t have to borrow large sums of money to finance the work because you are financing it for them.

And (here’s the fantastic bit) they will set up a finance scheme with their bank where you pay the bank for the privilege of early payment of your money.

This is the same money paid to Carillion by the client within 30 days – some 90 days sooner than Carillion wants to pay you.

Now, isn’t that wonderful? Isn’t Carillion the best?

It doesn’t stop there… No, wait… Listen. If Carillion decides at any point to stop the early payment facility then you, the sub-contractor, are automatically committed to the 120 day payment contract signed at the start, with no further financial assistance from Carillion.

So breath-taking is this scheme that Balfour Beatty, Kier, Wates, Willmot Dixon, ISG and Morgan Sindall have so far declared their interest in similar schemes.

And to top it all the Government is encouraging the whole industry to follow suit.

So we, the poor beleagured sub-contractors, finance the main contractor with our money and have to pay for the privilege of doing so.

I think I’ve died and gone to heaven… or somewhere. Wow! What a scheme. Where do I sign?

As the chief executive of Miller Construction said: “What’s wrong with paying on time, within 30 days?”

Er… well… yes. I’m not sure. Carillion, can you answer that one?

Robert Merry, MCIOB, ran his own stone company for 17 years and is now an independent Stone Consultant and Project Manager. He is also an expert witness in disputes regarding stone and stone contracts. Tel: 0207 502 6353 / 07771 997621