How to Select Subcontractors for Your Construction Project

Construction projects take a lot of time and expertise, and sometimes these are too big to handle by a single commercial general contractor. This is when subcontracting a project’s portions is a necessary step to take. A subcontractor, or specialty contractor as dubbed by others, is an individual or team hired through outsourcing to perform specific work or task that, especially in larger building projects. According to studies, around 75-80% of a general contractor’s expenses come from subcontractors’ and suppliers’ services and materials.

Subcontracting is essential in commercial construction because it is an answer to the complexity of a huge project, allowing parties to lessen financial and technical risks since subcontractors are considered to be experts in their niche. Since the main contractor’s job description is to oversee the entirety of the project, it is impractical to have them handle all the workload by themselves.

Selecting specialty contractors depend on the nature, need and situation wherein they need to fulfill the demand of a portion. Subcontractors are important to any construction, but how do you select the best out of all those who offer the same services in the industry? Here are a few good qualities that will guide you selecting the best subcontractor for your projects.

Ample Staffing Resource

For a subcontracting business to qualify, you must ensure that they are well-staffed and have enough people to do the job required of them. They should be able to provide pertinent information such as members along with their resume that highlights the scope of their experience. They must have a clear organizational chart that presents the contact persons or administrators who you can contact should a need to do so arises.

Ensuring that the subcontractor’s staff are reliable and qualified for the job is necessary, and you as an owner should check this before considering to hire them.

Licenses, Contracts and Insurance

Always check legal documents of a subcontractor before going ahead and employing them. Construction companies are able to perform smoother and faster commercial projects once the legalities are in place. Ask the subcontractor for their licenses and sample contracts to review how well they consider the terms and delineate the scope of their work. They also must have updated licenses so as not to have any trouble with the law during or after the project is complete.

Your company may have your own insurance, but it would not hurt if the subcontractor has an insurance of their own. This protects not only their staff but also you by extension, since their work performance and safety are guarded from any untoward incidents. Being insured is guaranteeing subcontractor safety, and shows that they care for their workforce. 

Reliable Safety Plan

A good subcontractor should have a reliable safety officer that mans their company’s safety during construction work. You can ask for the safety review of their past projects, and gauge whether they have excellent safety performance. Check the credentials and work experience of this resource person, and inspect their safety plan (which they definitely should have). Their safety program should not only cover their people, but also have environmental checks in place to answer any spills and emergencies that may hurt nature.

Steady Financials

Industrial general constructors are known to be stable financially, because this is how they proceed with a construction projects with minimal hiccups, but what of subcontractors? Although not required, there is always a positive when subcontractors have financial capabilities that can ensure they would be able to perform the job portion and have ample resource materials to use. Most companies would hesitate to disclose their financials, but you can ask for validated proof (i.e. bank statements, bonding capabilities) of their financial capacity to determine whether a bidder has the competence to do the job.

Equipment Availability

Specialty contractors with their own set of equipment and tools are basically more ready to perform specialized tasks for your project. Check whether their proposal includes the list of equipment available at their disposal, which should also highlight a maintenance or repair plan for when they break down unexpectedly. In the contract, it must be stated that maintenance costs and fuelling equipment are part of the responsibility of a subcontractor, since the equipment are theirs.

References

The number of positive reviews and recommendations a subcontractor has will usually determine how qualified they are for the job. As in any service, getting references from credible commercial construction contractors looks good in a subcontractor’s resume. It is your responsibility as an owner to determine this; make a few calls and interviews from past clients about the subcontractor’s performance from start to finish of the past project.

Past Projects

A bidder must present a list of past projects with important details such as the scope, budget, schedule, work hours spent and any special modifications done to complete the specific project. This is to review previous experiences and to get a general idea of how they perform in the workplace. Also, you can ask for details about any concurrent projects so as to determine whether this can potentially affect the resources needed for your own project.

Pricing

Practically, it would be beneficial for your finances to award the lowest bidder, but this should not be the case. Unless you can be sure that they will provide quality work despite offering to do work for a lesser price, then do not use cost as your main determinant in selecting a subcontractor. Inspect the payment terms in their proposal. Choose a group that do not ask for a large down payment—this is usually a red flag in subcontracting. Arrange for a payment schedule that you both agree on, and consider not only the amount of work but also the quality of services and materials that they can offer.

To hire the best subcontractor that would fit well with the job you require of them, you can make a set of selection criteria having all the qualities you want in the specialty contractor. If they check all the boxes, you can go ahead and have a sit-down with them to discuss the details of the project. Commercial general contractors and subcontractors should work harmoniously to ensure that the building project can smoothly proceed, and with little risks for all the parties involved.