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HVAC Contractors Face Challenges in Construction Tenders

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HVAC Contractors Face Challenges in Construction Tenders

How to Navigate Contractual Issues and Protect Your Business

When it comes to entering construction tenders, HVAC (Heating, Ventilation, and Air Conditioning) contractors face several challenges that can impact their ability to do business effectively. One of the most significant issues that contractors face is contractual manipulation and onerous conditions imposed by principal contractors or companies that award tenders. These companies often remove or add clauses that benefit them, which can be detrimental to the subcontractor. Moreover, the contractual issues faced by HVAC contractors often arise when working with a JBCC nominated or selected subcontract. Principal building contractors are increasingly stating that subcontractors will only get paid when they are paid, as opposed to the standard7-day payment cycle that typically follows job completion. This change can affect the financial stability of the subcontractor and create delays in project completion.

Another common problem is the use of outdated contractual documents, which can result in confusion and potential legal disputes. Subcontractors can protect themselves by ensuring that the latest publication of the JBCC contract document is being used. Additionally, the tender document should always include a section titled “Contract Data,” which details all contractual dates, insurance requirements, contracting parties, and other essential information that contractors need to ensure their compliance with the contract. To fully understand their contractual obligations and rights before entering into an agreement, HVAC contractors must study and understand the JBCC contract document and any “Special Condition” amendments. This understanding is critical to ensuring that all items provided by the principal contractor, such as payment for unfixed materials on or off-site, security provisions, water and power on-site, insurances, scaffolding, and more, are agreed upon and covered at the awarding of the tender.

To prevent and resolve common issues between principal contractors and subcontractors, HVAC contractors must ensure that there is a mutually agreed program in the final contract document that covers programming and access to carry out the work. Payment, delays, and delay notifications should be advised in writing and in line with the JBCC document or “Special Conditions” agreed upon by the Principal Contractor. SARACCA is a leading association in the air conditioning and refrigeration industry and is committed to promoting fair and ethical tendering procedures by inquiring and contracting parties. SARACCA also provides education and training to help HVAC contractors stay up to date on the latest industry best practices, particularly around contract management. New information updated best practices, and new regulations can all impact a contractor’s ability to perform their work effectively and within the terms of the contract.

Understanding and protecting your business against contractual manipulation, payment delays, outdated contractual documents, and contractual obligations and rights is critical to delivering high-quality work on time and within budget. By staying informed and educated on the latest industry best practices, HVAC contractors can protect their interests and navigate the challenges of construction tenders success

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