Thursday, October 21, 2010

What do statistics tell us?

The BCIPA (Qld) has just released its 2009 - 2010 adjudication statistics.  They make interesting reading, but what do they mean?

68% of claimants are subcontractors and a whopping 85% of respondents are contractors or head contractors.

Contractors, even the biggest, are just are not getting it.  The Payments Act is designed to improve payment processes and reduce disputes.  It is high time the industry took its focus off disputes and made a real attempt to "get it right".

16% of Claimants are contractors, but only 5% of respondents are clients.  It indicates that most disputes are inside the industry - contractor to contractor.

The average claim was $253,000 and the average decision was $232,000, indicating that, on average, claims were over 90% successful.  This is an amazing statistic and indicates very clearly that contractors are failing badly with contract and payment management processes.  The industry must engage properly with the Act as a business-as-usual practice if these statistics are to improve.

Consultants (11%) and suppliers (5%) are starting to use the Act to collect disputed payments.  Suppliers are still largely unaware of their rights under the Act and are mostly tied to accounting systems that are not conducive to making the Act part of their business practice.

999 applications were lodged in the year, a rise of around 100 over the previous year, indicating more awareness and a willingness to use the Act to recover debt.  The total value of claims was $224 million, consistent with last year.

The largest claim was double the previous year, at $32.7 million.

Small claims did well, with 82.4% of claims up to $5,000 awarded in full.  From experience, we would say this is largely due to very poor contract / payment management on the part of contractors.

Claims over $500,000 were less successful
with 9.4% paid in full, indicating that respondents are much more prepared to fight off a large claim.

You can significantly improve your chance of succeeding by using proper , complying processes for contract and payment management.  Thepowertool empowers everyone in your organisation to contribute to securing your entitlement to payment.

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