Subcontractors are viewed by the client as an extension of the main contractor (general contractor) and a failure by the subcontractor can adversely affect your company’s reputation.
Unfortunately some contractors don’t manage their subcontractors. They appoint them and then leave them to get on with the job. Often project staff aren’t briefed about what the subcontractor’s scope of work is. Time and again there is a lack of communication. When there are problems the subcontractor is blamed.
Managing your subcontractors
Some important points to note when managing subcontractors are to ensure:
1. the contractor’s person managing the subcontractor understands:
- the subcontractor’s scope of work
- who is responsible for supplying what
- how the subcontractor will be reimbursed
- complies with the project’s safety requirements
- produces work of acceptable quality
- works according to the project schedule
4. regular meetings are held with the subcontractor to discuss safety, quality and environmental matters, as well as progress on the project and any delays and claims, and that minutes of these meetings are distributed to the relevant parties
5. subcontractors acknowledge the receipt of drawings and information issued to them (or there’s proof they have received them) (I have had subcontractors claim they hadn’t received a particular drawing revision when they had)
6. where relevant, the subcontractor supplies shop drawings in accordance with the project schedule, including allowing for obtaining the required approvals from the contractor or the client
7. communication with the subcontractor of a contractual nature is in writing (any verbal instructions should be followed up in writing)
8. only the contractor’s delegated responsible staff communicate with the subcontractor (I have had subcontractors receive conflicting instructions from our staff resulting in confusion and errors)
9. action is taken as soon as it appears that the subcontractor could be in trouble (see my last article ‘Are your subcontractors profitable? Should you care?’)
10. the subcontractor is forewarned of the contractor’s intention to back-charge them for work or services supplied by the contractor and that these charges are invoiced regularly
11. the subcontractor is paid in accordance with the contract
12. the subcontractor has suitable quality, safety, environmental and industrial relations procedures in place that comply with the project requirements
13. subcontractors don’t begin work until there’s a signed contract in place and they’ve supplied the required sureties and insurances
14. the subcontractor’s staff, equipment and their own subcontractors are approved by the contractor
15. the subcontractor’s personnel attend the contractor’s project induction
16. correspondence from the subcontractor is promptly dealt with
When there are problems
Sometimes subcontractors do get into problems. It’s important to understand the reason for these problems which may be due to the main contractor’s poor management, delays, lack of communication or change of scope. However, it is also often due to the subcontractor’s poor management, lack of cash flow or incompetence. By understanding the problem you may be able to take action to rectify the problem or at least prevent it from getting worse.
It is important to follow the contract and ensure the correct notifications are given. Withholding payment for poor performance without providing the appropriate notifications may result in the GC being in breach of contract.
Subcontractors need to be managed by the main contractor (general contractor) to ensure that their performance meets the project’s safety and quality requirements, and that work is in accordance with the project’s schedule and specifications. Failure to manage subcontractors properly often leads to disputes, claims, project delays, substandard work and even accidents. This leads to project failure, often resulting in all parties losing money and the client getting their project late which negatively impacts the contractor’s reputation.
Other articles by the author:
Are your subcontractors profitable? Should you care?
Is the cheapest really the cheapest?
The importance of planning your project.
(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’. Both books are available in paperback and e-book from Amazon and other retail outlets. This article is adapted from information included in these books.)
© 2015 This article is not to be reproduced for commercial purposes without written permission from the author.