A Fairy Meadow firm says it is owed about $500,000 by government contractor Reed Constructions, which was on the verge of collapse yesterday, threatening 1500 jobs across the state.Traffic Logistics, a traffic management company, will have to lay off half its workforce if it is not paid by Reed, which still owes the company money from upgrade works to the Great Western Hwy at Hazelbrook.Managing director Josh Sergi said he was happy to work with Reed initially because it was backed by the State Government."The reason we took this on was that it was a government job."Mr Sergi said Reed Constructions had stopped answering his calls yesterday morning and he was now just watching and waiting to see whether a compromise deal could be reached.It is believed the construction company owes contractors between $60 million and $80 million for work on state-funded projects. Reed has stated the Government has not paid it for work carried out for the Roads and Maritime Services and the Building the Education Revolution (BER) program.The company's managing director, Geoff Reed, said yesterday it was involved in talks with the NSW Government to "resolve an issue relating to payments for works"."As these discussions are ongoing, we are not able to make any further comment at this time," Mr Reed added.The national secretary of the construction division of the CFMEU, Dave Noonan, said the Government needed to ensure there was security of payment for contractors that do its work."We have a situation where, again, we have a building contractor telling us that they have done work for the NSW Government, that the work they have done is the work performed to the standard they're contracted to perform, and yet the Government is withholding payments that are legitimately due to that company," Mr Noonan told Reed workers at the NSW Supreme Court building site in Sydney."We can't have a situation in this industry, where contractors who do the right thing, who pay workers properly, who look after their contractors and who perform good quality work for the NSW taxpayer, are driven to the wall by unconscionable behaviour by the State Government."Opposition Leader John Robertson called on Premier Barry O'Farrell to intervene and ensure that Reed, and its 1500 subcontractors, were paid.He said one contractor had told him he was owed about $280,000 for work completed on the Great Western Hwy."We need to make sure that this Government meets its obligations, secures your jobs, makes sure your boss gets paid, so that you can get paid," Mr Robertson told the workers."We need to make sure that Barry O'Farrell and his government are held to account, that they are made to pay these bills, so we don't see companies like Reed Constructions going under and you all losing jobs."NSW Finance Minister Greg Pearce said discussions with Reed were continuing, but denied that payments to the company had been withheld by the Government."I am advised that RMS [Roads and Maritime Services] and the BER Program Office have for several months paid all of their payments to Reed ahead of contract terms to assist their ability to meet subcontractor commitments," Mr Pearce said."Further, at the beginning of the BER contract, Reed were given an advance payment of $27 million ... to assist cash flow."The Government's priority is to protect NSW jobs and to ensure that these projects are completed, while ensuring that NSW taxpayers get value for money."