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Subcontracting Essay

2422 words - 10 pages

In the construction industry, subcontracting is not only common place but it is also necessary for the timely completion of projects, in many instances. General contractors will subcontract 75% - 85% of a project’s complete scope of work out to contractors that specialize in certain trades or areas of expertise. Subcontracting is an economical way to obtain specialty services when the general contractor does not have the time, the specialized equipment, or the manpower to do certain portions of a project (Schaufelberger and Holm pg 91). Subcontracting work can often lead to a reduction in the price of a given scope of work. A real life example would be when a general contractor uses union ...view middle of the document...

Nor do the consultants have any type of contractual obligation to the owner or the general contractor. The subcontractor actually has a separate contractual agreement with the general contractor for its given scope of work for the project. The subcontracted work then becomes a work package within the overall project and its schedule must be incorporated into the overall schedule of the project (Neil pg. 207). A failure to efficiently incorporate the subcontract schedule into the overall schedule can result in delays, a reduction in the quality expected for the project, and possibly legal action taken against the subcontractor or the general contractor.
Subcontractors are by and large specialty contractors possessing both the specialized skills and the equipment to perform given tasks faster, cheaper, and hopefully with more quality than a general contractor could provide by doing the same job themselves (pg. 206). However, subcontracting is not without its problems. Some of the same things that make subcontracting advantageous can also lead to some serious risks posed to the general contractor.
Some of the risks that a general contractor will encounter with respect to subcontracting out parts of a project are that the general contractor has to give up control of the work which includes the works overall quality and speed. Subcontractors are only obligated to perform the tasks defined in their scope of work included in their contract documents. This can create problems if items are mistakenly left out of the subcontract. If items are left out of the subcontract, the general contractor will either have to complete the task themselves or add to the subcontract through a change order which needs to be avoided, if at all possible. The smallest amount of change orders that are submitted, the greater the chance of staying on schedule and within the given budget supplied by the original contract document between the owner and the general contractor (Fisk pg 22-23).
Some of the reasons that subcontractors can pose problems can include a poor or unclear scope of work. Selection of unqualified and incompetent subcontractors can also cause serious problems on a project. Poor scheduling and coordination of the subcontractors work can pose lengthy and costly delays with the projects overall schedule. Not resolving technical issues involving the subcontractor’s work can also cause delays and possible poor quality of the work being performed by the subcontractors. Ensuring that the subcontractor will provide a quality finished product can be difficult. Paying subcontractors on time for an inspected and correct product should not be an issue but, at times, is made an issue. Developing lasting relationships with reliable subcontractors can prove to be difficult if problems exist throughout the project (Schaufelberger and Holm pg. 92). Many of the risks can either be eliminated or at least dramatically reduced by following certain rules and steps.
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