Managing Subcontractors: Best Practices
Working with subcontractors is an integral part of being a contractor. Depending upon your business model, project type and scope, your workload may be primarily handled by subcontractors, or they may only perform limited and specialised tasks. In any case, when the work is complete, the client and the ultimate beneficiaries of the project will not differentiate self-performed work from subcontracted. Because of this, your reputation and level of perceived success and quality of the project are directly linked to the success of your subs.
In a perfect world, we would all be blessed with subcontracting partnerships where issues are few and far between. But your world may not be quite that perfect. If you are having issues with your current subs or you are moving into an unfamiliar market, what can you do to garner a more predictable level of success with them?
One approach is to consider how you would potentially remedy an underperforming subcontractor and then work backwards from there, making those tasks part of your standard approach to your relationships with all of your subcontractors. What follows are some of today’s best practices to consider.
Get the contract right
First of all, it may sound obvious, but the actual contract is important. Even though a subcontractor is eager to sign and get to work you should still take the time to review and understand the whole contract language with them. Contract agreements and approaches vary significantly by company, region, and market. The subcontractor may have worked with your company before in a different division and made assumptions that were incorrect. There may be a flow down from the prime contract that adds costs or time that they had not considered in their bid. You may have specific reporting or invoicing requirements that could cause problems later if they do not begin with the right approach.
Conduct regular reviews
Another up-front remedy is the recurring meeting. Establish KPIs at the beginning that are important to you and how often you would like them reviewed. Consider all the aspects that you would expect of your own team and add those to your regular cadence as well. Items such as safety, quality and design adherence will be important to your subcontractors, and validating they remain in line with the project will always be time well spent.
One sign of a relationship going sideways is when one or both parties start to keep copies of their correspondence. However, what is looked at as a necessity if things are going poorly can be the exact thing that could prevent that from happening. Establish a formal path for questions and responses. Mutually agree on the request for information (RFI) process and workflow. Define the expected response timelines. Confidence in communication can make a meaningful impact on long term success.
Instil consistent change management
Extend your change management best practices to your subcontractors. Make sure they understand how and when to notify you of any issues they encounter (ideally, this is part of their contract). Include issue progress and resolution as part of your regular meetings. Include any items that may result in change orders too, whether they are requested from the subcontractor or initiated by the client.
As a final note, and this is especially applicable on longer duration projects, make your subcontractors part of the larger project team. Technical professionals thrive on responsibility and recognition. Getting buy-in from subcontractors can pay surprisingly big dividends throughout the job. Include them in safety lunches, client appreciation events and the like. When appropriate, allow them to share their successes with the client in person.
By establishing and maintaining productive relationships with subcontractors, you can strengthen your entire team, helping you ensure success on your current project and the ones to come.
For more information, please contact InEight for a demo of the company’s integrated construction management software.