Subcontractor scope of works

Subcontractors often play an important part on our projects.
When they fail Project Managers are quick to point the finger of blame at their Subcontractor.
But, perhaps the Subcontractor is not entirely to blame.
Often problems with Subcontractors start long before the Subcontractor begins work.

• The wrong Subcontractor is selected. A Subcontractor who does not have:

1. The experience.
2. The resources.
3. The financial means.
4. Pride in their work.

Read choosing a subcontractor

• The Subcontractor is not provided the correct project scope, or project conditions when they price the project.
• The contract between the Contractor and the Subcontractor has omitted critical details, or has ambiguities and errors.
• The Subcontractor made an error when they priced the work and they cannot complete the project for their price

In this article we look at preparing the scope of works that the Subcontractor must price. ​

Scope of works – what work must the Subcontractor perform

• You need to decide what work is included in each Subcontractor work package.
• Failure to describe the scope of works correctly could result in variation claims or change orders later.
• Allocating work in a package which the Subcontractor does not have the skills for often results in problems.

Case study

On one project we appointed an Electrical Subcontractor to supply the lighting, which included external light masts.
When it came to installing the light towers the Subcontractor wanted to know where the concrete foundations were.
We assumed they were installing the foundations – but this was not in their contract.
We had to engage an Engineer to design the foundations, and then we had to construct the light tower foundations.
Extra costs we had not allowed for. And of course some delay.
The same thing happened when the Air-conditioning Subcontractor came to install the external air-conditioning units.
They wanted to know where the concrete footings were for their units.
Footings we had to get designed and then construct

Failure to allocate work correctly or properly describe the Subcontract scope

Failure to allocate work correctly could result in:

• Work being missed that has to be later added to a Subcontractor’s work as a variation or change order.

1. This could cause delays.
2. It will result in extra costs which were not budgeted for.
3. The variation is often more expensive than if the item had been priced by the Subcontractor originally.

• It could result in duplication with more than 1 Subcontractor allowing for the item.
• Work packages which are too large may limit the number of Subcontractors available to take on the work.
• Work packages which are too small could deter some Subcontractors, even increase the overall costs.
• Work packages requiring a mixture of skills could deter Subcontractors.
• Subcontractors may take on tasks they aren’t capable of doing

​Preparing the Subcontractor scope of work

• Understand what work will be done by Subcontractors.
• Check the capability and availability of Subcontractors.
• Group work by type and size to suit the capability of Subcontractors.
• It may even be necessary to group similar work into time parcels so that a Subcontractor does not have an overly long gap between tasks.
• Think about warranties – it’s not a good idea to split work where 2 or more Subcontractors could be responsible for something that fails. Work components should preferably be distinct and separable.
• Ensure that the Scope is clear.
• Be clear about who is supplying what.
• Ensure work is not duplicated or omitted

Ensure your Subcontractor has everything they require to price the work

It's important to get the Subcontractor's scope of works right and articulate this brief in their pricing documentation and contract document. Failure to prepare the scope of works correctly could result in items being missed and extra costs during construction.
In our next article we consider what should be included in the Subcontractor pricing documentation so that they can price the works correctly.

Other useful articles
Is the cheapest really the cheapest? - adjudicating quotations
Selecting The Right Contractors and Subcontractors for Your Construction Project
What’s expected of your subcontractors? Do they know?

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