Many General Contractors (Main Contractors) probably aren’t concerned whether their subcontractors make or lose money on their construction project. Why should it impact them? It would after all seem to be an anomaly, because if a subcontractor is making money it’s probably at the project’s expense? But no!
In fact some GC’s make a habit of squeezing their subcontractors so they can be more profitable.
"Squeezing subcontractor so that your company makes more money is usually counter productive and often costs the project"
Why it’s helpful when your subcontractor is profitable
A subcontractor who is profitable is usually a happy subcontractor, and a happy subcontractor is:
But a subcontractor who loses money:
"Subcontractors that become bankrupt often create a major headache for the project"
How you can assist your subcontractors
So why do subcontractors lose money and how can you assist them to make money?
Many smaller subcontractors aren’t astute as they should be, or don’t have the management skills and knowledge that they should. Some subcontractors are working on a number of projects at one time, trying to share their time and resources between their different projects and clients. They often don’t have the money for a large number of supervisors or project managers. Some General Contractors are happy to let their subcontractors bumble on, only taking action when there’s a major problem. I however, prefer managing my subcontractors and providing help and guidance when needed
"Be fair to your subcontractors, this includes paying them on time and not impeding their work"
How you can help your subcontractors?
When your subcontractor is in trouble
However some subcontractors will never make money on a project, due to their incompetence, or a contract price that is too low. (Selecting subcontractors for your construction project) I certainly don’t advocate you pay them money which isn’t due to them. Still, it’s important the Project Manager is aware of problems a subcontractor may have, particularly if they are losing money on the project, and takes mitigating actions, for example:
Subcontractors are vital to the success of many construction projects
"Successful construction projects are built by a harmonious team"
Construction requires teamwork. Often subcontractors are vital to the success of a project. A delay or poor quality caused by a subcontractor usually impacts the project as a whole and negatively impacts the General Contractor’s reputation. Proper selection of subcontractors including correctly adjudicating their quotation will help minimise problems. Managing subcontractors properly is essential.
#contractors #constructionmanagementtips #constructionsubcontractors
Other similar articles by the author
Understanding what impacts your company’s reputation
Did you make a difference on your project today?
Choosing a subcontractor
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