Subcontractors provide flexibility and specialized skills that make them valuable resources for construction firms. When they aren’t managed properly, however, subs can negatively impact your bottom line and bring risks to the jobsite. Here’s how you can effectively manage, schedule and retain your subcontractors to optimize their value and minimize your risk.
Vet your subs.
It’s important to check out your subcontractors so you will know their abilities, limitations and reputations. Ask about previous projects and take steps to verify the accuracy of their answers. Confirm that the sub is licensed and insured and look into any potential previous workers’ compensation claims. When screening, you will want to pay special attention to key issues, including safety records, previous work and supervisory experience, legal history, business management and the sub’s process on (and off) the jobsite. If you plan to use subs from a previous project, take some time to vet them again, and make sure they don’t have expired insurance or negative changes in safety records.
Clearly explain your expectations.
Make sure your subs know what you want and expect on your jobsite. Since subs can leave you exposed to both legal and operational issues, it’s best to use written contracts to enforce accountability. These should include language relating to each party’s authority and responsibilities, definitions of services, acceptance-of-work processes and quality standards, all relevant terms and conditions and detail of deliverables. If you aren’t sure what to put in your contract, seek counsel from a legal expert with experience representing parties in the construction industry.
Make a solid plan.
Work with your subs to create a clear plan for the jobsite. During your conversation, you should discuss safety talks, material deliveries, workflow planning and any other key issues that might impact a sub’s work. Create a project plan, which is then backed up by a reasonable schedule. Include clear milestones so you can account for progress. Consider using supplemental schedules for larger construction projects, so you can keep all dependencies visible. Signed work authorizations can also help you keep tabs on where and when a sub works on any given day. They can also help ensure previous work has been completed to the specifications.
Communicate often.
Provide a single point of contact for every sub so he or she will know where to go with problems and requests. Schedule frequent meetings to review completed and upcoming work, while keeping the focus on the interdependency needed for the entire project. Establish a formal reporting structure, which includes milestones achieved, an estimate of time remaining, accounting of costs billed, descriptions of any problems and a list of any unplanned time or work spent. If any problems arise, deal with them immediately, and put explanations in writing with specific instructions on what the sub must do to get back on schedule.
Pay on time, every time.
With the skilled labor shortage, it’s important to maintain rock-solid relationships with quality subcontractors. Always be sure to pay your subs on time, even if the client has yet to pay. A typical contract will usually specify partial payment at 30 and 60 days into a given project, depending on its length. Carefully review the hours the sub reports and make yourself available to help with problems and answer questions. This is essential for instilling loyalty among subs who have demonstrated a high quality of work and trust.
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