Selecting a Good Subcontractor for Your Needs

Selecting a Good Subcontractor for Your Needs

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Part of project management for construction is being able to choose a good subcontractor. Being able to choose a good subcontractor for a construction job can seem fairly simple and straightforward. After all, it would help if you looked for subcontractors with the best reviews. It might even be as simple as just getting a referral from a good colleague.

Unfortunately, as with most cases, things aren’t as simple as they seem, and selecting a good subcontractor can be a pretty, very critical step in ensuring that a construction project progresses smoothly. 

When we manage construction plans, we generally look for subcontractors who can adapt to unexpected situations, be very beneficial to the project, and save time and money and lives. 

So how do we go about selecting a good subcontractor for construction needs? Here are a few simple tips that can help you get the right subcontractor for the job.

Check Their Experience

It goes without saying, but a good subcontractor should have the proper and necessary experience in their respective fields. We do this to ensure that the quality assurance standards set by the client are met, in addition to many other requirements. 

To find out if the subcontractor has enough experience:

  1. Take the time to run a background check.
  2. Ask about the work they completed previously.
  3. Find out if you can get some information about their financial stability – a good subcontractor with a steady source of income shouldn’t have too many issues with money. 

If you know how to, try to get in touch with other colleagues who might know about the subcontractor. And if they’re willing, you can also get in touch with their previous clients. This way, you can get a clearer picture of their capabilities and experience.

Check Their Safety Record

Subcontractors who know what they are doing and are experienced in their field would have a good safety record. If they have prior cases that resulted in injuries or fatalities, this could reflect the subcontractor’s safety standards, which can negatively affect your construction project. 

Any injury or death in a construction job can delay it, cost the client money, or even shut it down entirely, so make sure your subcontractors take safety very seriously.

Check Their Operational Strength

A subcontractor might have good experience and show an excellent track record when it comes to safety. Still, if they cannot fulfill your construction needs due to their small number of employees and their small logistics network, they might not be the right one for the job. 

To learn about their operational strength, look at their organizational structure. We can use this to gauge the size of their workforce. If possible, check their supply chain as well.

It can also be beneficial to look at the size of their market segment and their recent projects. The sizes of the projects they have bid on and accomplished should give you an idea on their capabilities as a subcontractor.

Check Their Financial Strength

With what was mentioned earlier about checking their experience, you should check on a subcontractor’s financial capabilities. A quick audit of the subcontractor can reveal this. Focus on checking whether they have existing loans or have accounts that are past due. 

While this will not give you a full picture of their financial situation, it can give you some insight into their financial status and help decide whether this will prove a liability to the project. 

Check Their Capabilities Based on the Project Scope and Requirements

One of the reasons for getting a good subcontractor for your construction project is that your workers are not as capable or are not as experienced as the subcontractor when it comes to a specific job element. Thus the subcontractor’s workers and experts must be more qualified than your own; otherwise, why bother them? 

To be able to get the right subcontractor, it is essential to understand the project’s scope and requirements beforehand and then find the proper subcontractor for the work that falls outside your own company’s area of expertise. This may require some humility on your part, but asking for help is part and parcel of finishing a job successfully.

Check Their Quality Assurance System

A subcontractor that fulfills the earlier stated requirements and conditions should, by all accounts, have an existing quality assurance system that ensures and attests to the quality of the work they do for their clients. But it pays to make sure that this is implemented regularly and not just on select jobs from the most prominent clients. 

Check if they have good quality support staff and have field-quality management systems consistently in place. Find out if the subcontractor’s construction crew management team regularly attends meetings and inspects their crews’ work to maintain quality. And try to ask if they have warranties for their work and if there are clauses in their contracts, ensure mistakes will be rectified. 

Check Their Insurance

Speaking of warranties and clauses, subcontractors should have insurance. This should be insurance that provides adequate protection for both them and their contractees. Ensure that the subcontractor’s insurance comes from an insurance provider that understands and services construction companies and entities because more likely than not, they will have adequate coverage for your project.  

Check if the Subcontractor will Subcontract as well.

This is sometimes unavoidable, especially when there are sudden changes to the overall project scope or new additions to the subcontractor’s project requirements. If this is something that the subcontractor might do, find out if they will be transparent. If they are, will the entities they subcontract to have the same capabilities as they do? 

In addition, insurance matters here as well, as sometimes a subcontractor who subcontracts gives a downstream risk transfer in the contract, and there are times that when this happens, the bottom tier subcontractor will not be properly covered by insurance.

Check their Prices

At the end of the day, while all of the conditions to get a proper subcontractor are met, it will do the project no good if the pricing is not accurate and will push the budget beyond what has been set. To be able to get the proper and best value for the work to be performed, it is best to get proper unit pricing based on the building site, the materials to be used, and anticipating any potential for additional work or rework. Using this as a reference, make a proper budget for subcontractor work, and use that as a basis for studying the bids of the subcontractors you are looking to get. 

The Risks of Making the Wrong Choice

The problem with choosing the wrong subcontractors is that even if they’re the ones who might make mistakes, you will still have to be answerable to your client at the end of the day. Here are the possible risks you might face in making the wrong choice when it comes to subcontractors:

  1. Scheduling delays and additional costs – Mistakes done by the subcontractor would have to be fixed. This will cost more time and money and delay the project and inflate the costs, potentially making the project go over budget.
  2. Defects and accidents – If a mistake by a subcontractor goes unnoticed and unattended, then this can result in defects appearing in the construction project long after it is finished. This can result in defects in the construction, resulting in civilian accidents or injuries, or worse. This can be a liability for you and your client.
  3. Liens and liabilities – If a subcontractor cannot carry themselves in between payouts, such as being unable to pay a material supplier for the job, then a lien could be placed on your property and construction job. This is very crucial as this adds to your list of liabilities that would have to be handled.
  4. Leaving the job behind – Subcontractors who are incapable of handling the job or do not have the proper financial and operational strength can pack up and leave without warning. If this happens right after a large down payment has been made, this will result in a financial and legal headache that can be detrimental to your construction project.
  5. A tarnished reputation – Like what we stated earlier, even if your subcontractor has shortcomings and mistakes, you as the project owner will be responsible for the subcontractor’s actions at the end of the day can affect your reputation. 

A subcontractor is like an extension of your own company or team. This is why it is crucial to find and hire the right one for your construction projects. Having the right balance of operational and financial strength, good safety practices and quality assurance protocols, and a great work ethic and untarnished reputation are all hallmarks of a good subcontractor. 

Getting the wrong subcontractor could lead to a bad experience and make managing a construction project harder than it should be. It could delay or cancel your construction project and ultimately tarnish your reputation. So make sure that you get the right subcontractors for your job by following our suggestions above. 

And if you need help in managing your subcontractors, or your project as a whole, Pro Crew Schedule can help! Let us help you simplify your project overall and find out how our service can aid in the management of your crew of in-house and subcontracted personnel.

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