Effective subcontract management

As we all prepare for the festive season, how ready are you and your subcontractors? Do you and your team wish to be in the “top 4” for Christmas? If so, here are my top 4 tips to effective subcontractor management:

  Get it right Get it wrong

1. Procurement – hire the right people and try to avoid single source dependency

Reputational advantages; increased work; you always have an alternative.

Reputational damage; loss of work; failure to complete work; adverse financial impact.

2. Communicate – produce a full Statement of Work (SoW) and review

Defined expectations for all parties; minimize snags before they occur; set out consequences of underperformance; builds strong relationships for future project work.

You are sued as subcontractors “employer”; subcontractors make decision to work direct with customers and recruit your team members; time wasted; reputational damage.

3. Billing basis – get the pricing right

Clearly defined payment milestones linked to project delivery plan; maintain strict change control; minimise cost to the customer; increase reputation.

Reduced profitability; loss making projects; poor stakeholder management; cash flow problems; reputational damage.

4. Monitor and review – communicate at the earliest opportunity and regularly throughout the project life cycle with subcontractors, customers and stakeholders

Strong risk management; ability to foresee issues before they happen; minimise any adverse financial impact; improved stakeholder management.

Failure on project delivery; poor change control initiated by subcontractor; reputational damage.

Are you in the construction industry and affected by CIS? Are you wondering whether you should be in CIS? If so, and you want to know how to ensure you retain your gross payment status then get in touch. The penalties are HUGE!

Andrew Kennon, Corporate Director


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