Major construction company collapses as $100 million company collapses under the weight of labor shortages and massive price hikes
- BREAKING NEWS: Another large construction company has collapsed
- The Western Australian company FIRM Construction has been placed in receivership
- Subcontractors reportedly owe hundreds of thousands of dollars
- The Australian construction industry is facing higher labor and material costs
A company that had sales of nearly $100 million just two years ago is the latest company in the construction industry to go bankrupt.
The Western Australia-based FIRM construction announced Thursday evening that it had entered receivership, reportedly spending hundreds of thousands of dollars in subcontractors.
CEO and co-owner Mark O’Gorman said the company was undone by mounting financial problems caused by higher labor and material costs.
“We have been closely engaged with the Treasury Department over the past few weeks to ensure our approach is aligned with how best to run our public sector projects, and we hope that this process will continue as we take steps to restructure the organization. company,” he said.
Mr O’Gorman said that while the company had completed 75 projects worth $500 million for the WA government since 2010, FIRM has been hit by labor shortages and global problems since the start of the Covid-19 pandemic. the supply chain.
The storm of crises plaguing the construction industry has led to the reduction of profits on existing fixed-price contracts.
“It is unfortunate that five projects awarded by the state government between July 1, 2021 and May 2022 were not eligible for any financial support for the significant cost escalations they incurred,” he said. The Western Australian.
Earlier this week, FIRM lost the contract to build a school over fears it wouldn’t be ready next school year.
Subcontractors on that project would owe several hundred thousand dollars.
More to come…