Subcontractors believe they are owed almost $8 million for work they did on projects managed by the State Government, WA’s Small Business Commissioner has found.
Commissioner David Eaton, who was asked to investigate the failure of building companies to pay subcontractors for work they did under the Federally-funded Building the Education Revolution program, delivered his first report to Finance Minister Simon O’Brien on Wednesday but will not complete his final report until the end of January.
Mr O’Brien said the subcontractors had claimed total losses of $13.6 million, $7.8 million of which was linked to projects managed by the Department of Finance’s building management and works division.
More than half the $7.8 million figure related to projects carried out under the BER program.
Irate subcontractors started sending letters to Mr O’Brien’s office in November last year through high profile lawyer John Hammond, demanding the State Government compensate them for the losses.
They argued BMW breached its duty of care to subcontractors by failing to investigate, inquire or ascertain the solvency of its contractors, despite several contractors telling BMW they were not being paid.
Mr O’Brien said 40 per cent of the claims were worth up to $25,000 and 20 per cent were more than $100,000.
“However, the bottom line is I currently do not have enough information to make any sort of decision on government responsibility for subcontractor losses,” Mr O’Brien said.
He would not be able to resolve the issue until mid-May at the earliest.
“I know that this will not make subcontractors doing it tough happy but this is the truth of the matter,” Mr O’Brien said.