The scope of many larger construction projects often means that you will need to hire subcontractors to get the job done. Even smaller projects can require a subcontractor if you need specialized skills that your current employees don’t possess.
The following suggestions can help you determine how to manage subcontractors in construction to ensure the best outcome for you, the subcontractor, and the project.
- Get a written contract: All of the terms of the agreement between you and the subcontractor should be recorded in a written contract signed by you and an authorized representative of the subcontractor. The document should clearly state all the roles and responsibilities of the subcontractor and what is expected that the subcontractor will do on the job. Include details on how the subcontractor should handle issues such as changes requested by the client dealing with unexpected problems. Other details can also be included, such as payment terms, information on penalties, and additional terms and conditions. Review the contract every year and make any needed changes or additions.
- Make sure your subcontractor is qualified and protected: Check the insurance and bonding status of your contractor to ensure your partner is financially responsible. Look into licensing and certification status to make certain the subcontractor is qualified to do the work and is authorized to operate in your state or city.
- Ensure your subcontractor follows your customer service standards: Make it clear that your subcontractor must adhere to your customer service standards when communicating with clients. If the subcontractor can’t handle a client’s issue, make sure there is a clearly identified contact within your company who can help.
- Pay properly and promptly: Pay your subcontractor promptly and within the terms of the contract. Much like other small businesses, your subcontractor will be counting on timely cash flow to pay the employees and keep the company operating. Honor all terms regarding performance incentives or bonuses.
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