Strong & Weak Spots of Subcontracting in Construction

The attraction of independent specialists to perform narrow-direction tasks is about subcontracting. It means that the general contractor hires individuals who are competent in their professional niches like plumbing, flooring, insulation, roofing, etc. This way, the building company finds skillful experts to cover some labor resource needs and meet specified deadlines by the client.

But subcontracting can be not only beneficial for present-day construction market players. The general contractor has a risk to cooperate with non-qualified specialists and find even more challenges than there were before hiring workers. Cost estimating software can prevent some financial issues while having relationships with subcontractors. But there are other pitfalls to take into account.

Compare all the benefits and disadvantages before trying subcontracting and drawing any conclusions. You should be sure that the final result will be suitable for you. But first, let’s take a closer look at the list of essential aspects of subcontracting in general.

What Are the Main Aspects of Subcontracting in the Context of the Agreement?

Work under the contract cannot be performed if there are no essential conditions in it. That is, in the agreement signed between both parties (a contractor and subcontractors) there are many necessary aspects to take into consideration:

  1. The subject must be defined. Namely, a specific result (a finished product, a thing, an object of construction, any material result).
  2. Timing matters. Such an agreement has a peculiarity, the customer is not interested in the process of activity, but in the result. Therefore, be sure to indicate the start and end dates of the work. If the contractor did not manage to complete it on time, then he bears the agreed responsibility.
  3. The price must be indicated. It can be fixed or in the form of an estimate. If the cost has increased, the contractor is obliged to warn the customer and justify the price change.

To sum up, the deadlines and payment responsibilities should be discussed before the agreement is signed. This way, you will be able to build transparent relationships with no issues concerning scheduling and financial or legal backgrounds.

PROS & CONS of Construction Subcontracting

It is worth noting that construction subcontracting is about beneficial interactions. If both parties understand their benefits, this is the most optimal way of such cooperation. If we speak about ever-green partnerships and business relationships built on subcontracting, the general contractor gets sped-up building operations, competent performers for the narrow-direction tasks (plumbing, flooring, painting, etc.), and satisfied clients with the terms and costs of the construction project.

Speaking about the subcontractors, they can opt for limited responsibilities. They need only handle their work and meet deadlines specified by the contractor. All the legal backgrounds together with reporting, accounting, estimating, certification, and insurance are on the shoulders of the GCs. If the specialist would like to undertake various niche tasks and avoid headaches with documentation, subcontracting is one of the best ways.

Nevertheless, there are risks for both parties:

  • Low-quality work or dishonesty;
  • Failed deadlines;
  • Financial and legal issues;
  • Problems with coordination, scheduling, etc.

A transparent contract can help contractors and subcontractors avoid most of the above-mentioned challenges. But sometimes subcontracting is really far from the best-matching solution. For example, present-day subcontractors who would like to scale up their businesses in construction should consider the option of independent contracting directly with the customers.

If you are good at networking and have already formed a client base, it is better to start working independently from other contractors. Even a plumber can become an independent specialist with no intermediary parties in the agreement. Everything depends on the reasonability of this decision. All the independent contractors have a good client base and excellent local reputation. 

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