This website uses cookies to ensure you have the best experience. Learn more

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.

Other Essays Like Subcontracting

Final Proc 5890 Essay

3272 words - 14 pages and operated by woman, who recently immigrated from ethnic Chinese family and the business was recently certified as a small disadvantaged business under the Small Business. By hiring Wong Foo Pacific Gravel will receive additional compensation. The operative clause in the contract as follows; “Subcontracting, This subsection is supplemented to include a Disadvantaged Business Enterprise (DBE) Development and Subcontracting Provision as follows

Nike Inc.: Developing an Effective Public Relations Strategy

1783 words - 8 pages and managers. According to Knight the subcontracting of the manufacturing facilities created a greater “economic advancement of impoverished people and better values for the consumers in developed countries” (Everatt, 1999). This global expansion paired with large international marketing effort made Nike into one of the world’s most recognizable brands. During the 90’s there was a large amount of negative publicity surrounding Nike. This negative

Advanced Contract Formation and Administration

1674 words - 7 pages a mandatory evaluation factor for negotiated procurements expected to exceed the simplified acquisition threshold. Does a government contracting officer have a duty to explore this evaluation factor in greater detail than what an offeror provides in its response? Under FAR.304 (c)(3)(ii) For solicitations involving bundling that offer a significant opportunity for subcontracting, the contracting officer must include a factor to evaluate past

Frich Turbo Engine Company Case

671 words - 3 pages – rate at which labour is paid could be less due to involvement of engineering and more automated processes in place. Cost of Manufacturing – overhead saved (save on benefits, insurance, wages) by subcontracting resources, parts, or geographical location where labour is cheaper. Cost of Tooling – possible similar tools are are already being used for other projects and only minimal adjustment would be required to manufacture for Frich. General

Business Failures

1022 words - 5 pages services include free individual face-to-face and internet counseling, as well as low-cost training for the entrepreneur. (What we do| The U.S. Small Business Administration|, n.d.) SBA has set goals with other federal departments and agencies to reach the statutory goal of 23 percent in prime contract dollars to small businesses, and in doing so, provides small businesses with subcontracting procurement opportunities, outreach programs, and

Lesson 13

937 words - 4 pages that are about to occur. I would have the union come in and talk with my employees and give them an overview. I would allow any one-on-one discussions as well. 3. Considering the labor force/supply in my area I do not think subcontracting and/or outside recruiting would be a means to quell this union movement. The operating staffers, in my opinion, are not being paid fairly. If the wages and benefits of administrators and faculty continue to

Costing Methods

979 words - 4 pages COSTING METHODS Clifford Brown ACC/561 November 9, 2011 Wanda Rivers Costing Methods Super Bakery Inc. was a virtual corporation in favor of subcontracting its major business applications. This was with a view of reducing the cost of operation comparative to its levels of income. By Super Bakery Inc outsourcing, they are able to manage control of the flow of the actions that produced its revenue. This was

Aggregate Production Planning

973 words - 4 pages uses overtime work, subcontracting and part-time workers to meet demand. The main advantage of using the chase strategy is tremendous flexibility to meet demand fluctuations. The disadvantage is that it may mean higher hiring and training costs. Manufacturing Planning 5. Level scheduling is used when demand is stable. Here the focus is on maintaining a constant production rate. The workforce does not change. This strategy has several

Business Econ545

1089 words - 5 pages whether it’s adding an additional shift, running overtime, or temporarily subcontracting the production. In the long run the increase in demand will dictate to potato growers that they have to increase the crops to increase the supply and support their customers. The increase in demand will also suggest the increase in competition keeping the price steady. The manufacturing of computer chips is much more complex which includes the

Ops 571 Final Exam (Newest) - Assignment

1369 words - 6 pages new product? • $290,700 • $500,000 • $390,000 • $250,687 14. A material requirements planning system is an example of which of the following scheduling systems? • Infinite loading, backward scheduling • Finite loading, backward scheduling • Infinite loading, forward scheduling • Finite loading, forward scheduling 15. Capacity planning that involves hiring, layoffs, some new tooling, minor equipment purchases, and subcontracting is

Factories and Sweatshops During the Victorian Era

1099 words - 5 pages where it would be pierced and closed. Than, the uppers would be brought back to factory were later, the bottom would be taken off. Another subcontractor would than laced them on and give it to another subcontractor for finishing.(Schmiechen 52) Many of the subcontractors to the factory had their own subcontracting, either their neighbor or family members. Many of the work they done was beautiful but if the subcontractors done incomplete work or

Related Papers

Federal Contracts Sealed Bidding Essay

804 words - 4 pages partial set asides may be conducted by using either sealed bids to competitive proposals. (Hearn, 2011) The president also establishes annual government-wide subcontracting goals that help the agencies formulate their own specific goals. A determination to make a set aside may be a unilateral decision by the contracting officer. Once the product or service had been acquired successfully by a contracting officer on the basis of a small

Sri Lanka Subcontract Gem Company Essay

829 words - 4 pages in Sri Lanka. By combining Waterford Crystals expertise and reputation with the natural resources of Gems in Sri Lanka, we found we could exploit the growing trends in exports of gems and jewellery which is currently worth $450million but has the potential to be a billion dollar industry in the country with Waterford Crystal to the fore. Why subcontracting in Sri Lanka? One of the key components in our research into Sri Lanka and the

Create Compelling Vision Essay

1021 words - 5 pages , and upholding billing software and workstation equipment. Medical billing businesses charges a regular rate per claim or a fraction of the repayment on each claim. Whichever method is less expensive than anything you wanted to compensate for a medical billing team to deliver the similar special services that are delivered by subcontracting with businesses. Consuming a medical billing facility permits a constant, sturdy movement of claims going

Acqualisa Essay

750 words - 3 pages have to stock up this product because their primary customer is the plumbers. Secondly, showrooms also offer installation services by subcontracting with contractors or independent plumbers. Once plumbers are convinced and informed about the benefits of the new product like ease of installation, they will become a source of word of mouth to push showrooms to call attention to Quartz by emphasizing the low cost of installation. Similarly, plumbers