Wayne Bloomer has a plan to limit the damage his company's financial problems will cause to Subcontractors and after talking to him, I believe it's in our best interests to support his plan.
Bloomer Constructions is not incurring new debt in relation to his use of Subcontractors, he has stopped work on his projects. Instead he is trying to minimise the fallout for Subcontractors, his staff and his clients.
Diogenes was a Greek philosopher who was one of the founders of cynicism, the industry has made me cynical.
One of his cynical stunts in the 320's BC was to carry a lit lamp around the streets of Corinth in broad daylight and when someone would ask him, Diogenes what are you doing? He would say, "I'm trying to find an honest man".
That's what it feels like in the Queensland Building Industry in 2017 but from the outset, let me say, not all builders are dishonest and despite what some people think, I have never said or inferred that. It's just an unfortunate fact that the dishonest ones drag the whole industry down.
Discussion with Wayne Bloomer
I had a discussion with Wayne this morning, from what he has said, he has the interests of all his subcontractors at heart and and we as a group should support his effort. Its our best chance. By all means, get your own advice, personally I have made a decision that will give our company the opportunity to make the most of a bad situation.
The alternative is liquidation with the usual nil return to Creditors.
Wayne said that last year he put million of dollars of his own money into the company until his funds were exhausted. He said "I did that to minimise the fallout for Subbies".
Why this happened is a question that can wait for another time.
Job Sites - Project Bank Accounts
Wayne said he is in the process of negotiating with all the developers of his various sites.
They have a signed document for one project and are working with the others.
The agreements he is brokering is for the developers to:
- Implement Project Bank Accounts
- To continue using Bloomer Supervisors
- To use Bloomer office staff for continuity
- To use current Subcontractors to the finalisation of the projects
- Any monies owed to Bloomer will be paid direct to the Subbies through a project bank account to ensure security of payment.
He said in an email yesterday "we have a signed document for one project today (13.02.17) and are working on the rest with good feed back".
Today he told me that a developer has verbally agreed to these terms and they will use a project bank account. Another developer needs to take it to their bank but it looks positive.
Wayne also said that yet another developer has agreed to a similar deal.
Disaster or a Victory?
The problems Bloomer Constructions face and the resolution that Wayne Bloomer is working towards, can end in an epic disaster for the industry or it can be a major victory for all participants if common sense prevails.
He could have taken the easy way out like many before him but he has decided to fight the good fight. There will be financial pain for all of us but it will be a mortal wound if his license is suspended and administrators are called in.
The industry is already in a world of pain from previous liquidations going back to Walton Construction with the most recent being Cullen Group and Batir.
Project bank accounts are a key component of industry reforms that Les Williams and Subcontractors Alliance have been fighting for.
Wayne Bloomer told me on the 6th of February that he thought they were a good idea, now he is trying to implement them to protect Subbies payments. This will be the test run the industry needs to move forward with these reforms. If they work well here, they will work well in the future.
Questions for the QBCC
- Can you indicate to us your willingness to extend the time you have given to Bloomer Constructions QLD Pty Ltd to show cause?
- Are you willing to allow them to complete the works on the basis of a project bank account being put in place?
Please send your answer to us at support@subbiesunited.com.au and copy in Les Williams at les@wkcivil.com.au so that we can inform our members and the Subcontract and Supplier community.
I believe it would be in all Subcontractors and Suppliers best interests if the QBCC use their discretion to allow Bloomer Constructions to keep it's license in place until the end of these projects to avoid cancellation of contracts by developers. The fallout from that would be catastrophic for an industry that is already badly wounded.
There has been enough damage to Subcontractors and more can be avoided if a pragmatic approach is taken by the peak industry body.