Insights and Advice for Enabling More Efficient and Sustainable Construction

A Complete Guide To Efficient Subcontractor Management

12 June, 2024
17 mins read

subcontractor management guide by RIB Software

In the construction, mining, and industrial sectors, subcontractors are essential in delivering a project on time and within budget. Engaging and employing subcontractors for the appropriate tasks is a priority for main contractors, particularly when the job demands multiple specialized subcontractors’ appointments.

Subcontractors are responsible for helping general contractors complete their projects on time and within budget. From enormous builds requiring large-scale resources, to smaller ones that call for specialized skills, a subcontractor is engaged whenever a main contractor lacks the resources or expertise to complete a particular aspect of a job.

This RIB blog post will explore the art of construction subcontractor management and how the proper best practices and tools can ensure subcontracting success. Let’s dive in!

What Is Subcontractor Management?

Subcontractor management is the process of procuring and managing subcontractors on a client’s behalf. In construction projects, the contractor is usually responsible for managing subcontractors with specialized software support to achieve expected results.

That said, managing construction subcontractors is about more than just hiring and monitoring. The process is much more complex and involves various activities, such as construction bid management, contract administration, and compliance.

The subcontractor management process happens in four stages, where the activities we just mentioned occur. Let’s explore these stages below!

  1. Pre-award: At this stage, the general contractor (GC) studies the project needs and sends requests for quotations (RFQs) and requests for proposals (RFPs) to procure the subcontractors needed.
  2.  Award: At this stage, the GC reviews the bids from subcontractors and selects the ones that best suit the project’s needs. The GC then negotiates contract details and requirements under which the subcontractor will work.
  3. Post-award: This stage occurs after the project has started. Here, the GC monitors subcontractors to ensure they perform their tasks according to the expected quality and timeline.
  4. Close-out: As its name suggests, this happens during the final stages of the project. The GC carefully inspects the work carried out by contractors and issues change orders if they are not happy with the result.

Types Of Subcontractors In Construction

overview of the different types of subcontractors in construction
Types Of Subcontractors In Construction

A successful construction project is a team effort. It is almost impossible for the GC to bring the project to life without the help of some specialty contractors, also known as subcontractors. These professionals manage specific areas of the construction process that require more expertise. Below, we discuss the main types.

  • Site preparation: As its name suggests, this type of specialized contractor is in charge of preparing the site for construction. This means bringing equipment to remove trees, level the property, and excavate for the foundations. In smaller projects, the GC might take care of this step themselves.
  • Concrete: This professional oversees anything that requires concrete, such as foundations, slabs, or a parking lot. In many cases, this contractor brings precast concrete parts, such as beams, walls, or stairs, to make the process more efficient.
  • Structural and framing: This specialty contractor installs the building’s structural components. The structure and framing might be wood, steel, or concrete, depending on the project.
  • Carpentry and flooring work: We saw that the previous subcontractor did most of the framing and structural work. Carpenters take care of interior finishes like cabinetry, doors, floors, and other decorative woodwork details.
  • Roofing, siding, and sheet metal work: This specialty encloses the building and protects it from damage from the exterior, such as varied weather conditions. These contractors often use prefabricated materials, making their work faster and more efficient.
  • Heating, ventilation, and air conditioning (HVAC): This specialty manages the climate inside the building. HVAC contractors usually install air conditioners, boilers, furnaces, and other equipment to ensure the climate inside the structure is safe and comfortable for occupants. In some cases, HVAC contractors might also take on plumbing and gas-related work.
  • Electrical work: These contractors are responsible for all electrical work in the building and construction site. They install electrical panels, wires, generators, fire and burglar alarms, and other equipment. They are often certified and have specialized permissions to install these types of equipment.
  • Plumbing: This contractor installs and maintains quality plumbing systems. Some common activities include drainage system installation, water pump installation, and water system balancing.
  • Drywall: These professionals are in charge of installing drywall on the framing of walls and ceilings. In case of renovations, they oversee repairing any issues related to drywall.
  • Painting and paper hanging: As its name suggests, this subcontractor is responsible for painting interior and exterior surfaces with great precision and attention to detail. Their process includes masking, sanding, priming, and caulking to leave the surface ready for painting. They are also in charge of installing wallpaper if needed.
  • Landscaper: This contractor is responsible for bringing the building to life by eliminating any damage caused during construction, designing gardens and walkways, and adding attractive accents to the landscape.

Who Manages A Subcontractor?

As you probably gathered by now, subcontractors don’t deal directly with the project owner or client. The general contractor is responsible for managing subcontractors. The GC must ensure that subcontractors are aligned with the project’s general goals and objectives and the expected quality and safety standards. This is often measured using interactive construction reports containing real-time progress data about performance.

Other stakeholders that play a role in subcontractor management include the project manager, who ensures subcontractors have the necessary resources, materials, and information to complete the work, and the site supervisor, who supervises them on-site, making sure that safety regulations and other requirements are respected. In less common cases, mainly for large construction firms, a dedicated subcontractor manager is appointed to deal with all aspects of subcontracting.

The Importance Of Efficiently Managing Subcontractors

Construction projects involve many moving parts and people that must be managed efficiently to ensure the least issues, delays, and cost overruns. Subcontractors are a fundamental part of this machine and can significantly affect the project’s result if not managed correctly.

A well-thought-out subcontractor management system will ensure your projects cost less and take less time to be completed. All aspects of the relationship will be managed beforehand, preventing any issues or delays due to misunderstandings, which means there will be fewer risks to mitigate. Other benefits include:

  • Better quality control is achieved through constant monitoring, with clear expectations set beforehand.
  • Improved efficiency on a project level as qualified people carries out specialized works, leaving the GC enough time to focus on other important tasks.
  • Better communication and collaboration between different trades ensure better outcomes with minimum waste.

How To Manage Subcontractors? Tips & Best Practices

6 valuable tips on how to manage subcontractors in the construction industry
Tips & Best Practices To Manage Subcontractors

Now that you know what this process is all about and how it can benefit your projects, let’s examine some tips and best practices for ensuring successful subcontractor management and boosting construction productivity.

1. Define your subcontracting needs

    Like any other construction process, a subcontractor management plan starts with efficient planning. This means thoroughly analyzing the project to identify the need for additional workforce or specialized trades. Doing so will help you begin the construction bidding process with a clear idea of what you need, avoiding wasting resources to figure it out as you go.

    2. Pre-qualify contractors carefully

      Once you have identified the project’s needs, it is time to pre-qualify potential subcontractors. Here, it is important to be very careful and critical to ensure you are sourcing the best candidates. For that purpose, you should always investigate key factors like past performance, safety ratings, financial stability, and, most importantly, experience level in the project context. Some of these things can be easily learned by asking for references from prior clients to get an idea of performance. This process should also be considered for subcontractors you have worked with in the past as their certifications might have expired, some key team members could not work there anymore, or something else that needs to be analyzed.

      Another good practice when pre-qualifying subcontractors is soliciting at least three bids per trade. This will ensure you have a clear idea of the available options and choose the one that best fits the project’s timeline and budget. Doing so also encourages bidders to offer competitive proposals to win the project.

      3. Define contracting details

        We mentioned that managing subcontractors starts in the pre-award stage. While that is the truth, it is at this stage when your subcontractor management system should really begin to shine. Contract negotiations will define the relationship between the GC (in representation of the client) and subcontractors for the project’s entire duration. Therefore, any agreements, responsibilities, deliverables, and rules should be put in writing to avoid any issues in the future. This includes payment terms, timelines, mechanisms to resolve potential disputes, safety measures, and much more.

        Defining everything clearly from the beginning will prevent any misunderstandings that can lead to project delays or legal issues with subcontractors, ensuring they effectively play their role in the project.

        4. Identify potential risks or scheduling issues

          As an extension of the previous point, when managing subcontractors, it is important to identify potential risks or scheduling issues that might affect the project later. Common risks related to subcontracting can include delays and quality or safety issues, among other things. Some of these challenges can be addressed during the bidding process to automatically discard subcontractors that are too risky. Other potential risks, such as scheduling issues, can be discussed during contract negotiation or other posterior meetings. For example, the GC can call for a meeting with all trades to organize the timelines. Tasks are sometimes given a couple more days than they would typically require providing room for error and prevent delays.

          5. Set clear communication channels to boost collaboration

            This is probably the most important best practice you can follow for a successful subcontractor management plan. Communication in construction has been a challenge for decades. With so many moving parts, a project will simply not succeed if all parties are working separately. That is why setting clear communication channels is so important for this process. The GC should keep subcontractors constantly informed about project progress, new developments, or unexpected changes. This will boost a spirit of teamwork that will encourage subcontractors to work together with the GC, offer ideas and solutions to issues based on their expertise, and bring the project forward. Professional construction document management software offers the perfect environment for collaboration and communication with the ability to share important documents and information in real time. Ensuring everyone remains connected and working from a single source of truth.

            6. Evaluate subcontractors regularly

              Another tip for managing subcontractors efficiently is to measure their progress and performance in real time. To do so, the GC must rely on construction analytics software to generate reports and track metrics that will provide valuable insights. These performance evaluations should be carried out regularly throughout the project regarding timeline adherence, quality of work, and responsiveness. This lets you promptly provide necessary feedback and prevent potential challenges from becoming bigger issues.

              What Can Subcontractor Management Software Do For You?

              Lacking information at the right time or in the appropriate format can severely impact a contractor’s ability to perform and deliver projects. However, the operational challenges posed by the complexity of these tasks can be addressed with the right technology.

              Using an integrated system that inherently understands the complexity of managing subcontract life cycles can positively impact contractors’ operational efficiencies and bottom lines.

              RIB Candy and RIB BuildSmart software were designed for precisely that purpose. Combining project control and fully integrated enterprise management, these solutions work together to offer seamless and flexible subcontractor management, covering life cycle highlights such as adjudication, contract award, progress, certification, and final account.

              There are several benefits for managers or supervisors overseeing subcontracts through such integrated systems:

              • Item tracking: Through the subcontractor management module within RIB Candy, items from the main bill of quantities (BOQ) can be isolated to create a separate subcontractor BOQ with its own awarded rates. Subcontractor BOQs can also be linked with those of clients to ensure more manageable cost and budget comparisons.
              • Legal compliance: A specialized system can help ensure compliance in terms of payment notifications and other processes, such as the local nuances of remittance. This is an immensely important feature in markets like the UK or Australia.
              • Variation orders: Industry-specific technology such as RIB CanBuild allows contractors to track changes and variations clearly and concisely. RIB BuildSmart also helps to streamline processes through real-time data entry and field solutions, effectively allowing contractors to navigate the complex world of variation orders with a simple, easy-to-use platform. The detailed and accurate records it helps to maintain, in turn, ensure that payment delays do not affect the project or its subcontractors.
              • Tracking progress: With resource planning platforms that understand contractor requirements, the contractor’s project teams can monitor and manage subcontractors at an operational level. For instance, RIB Candy’s direct, unique integration with RIB BuildSmart allows finance departments to track certificates, advances, retentions, and on-site materials in real-time, allowing contractors to do more with less.
              • Streamlined management: Contractors that typically engage multiple companies for several projects at a time need the ability to digitally manage obligations, subcontractor progress, and cash flows. An effective subcontractor management system can help projects, and package managers or supervisors track progress on every parcel at a granular level and ensure each project meets its planned deadlines.

              Final Thoughts

              As you learned throughout this guide, efficient subcontractor management is fundamental to the success of your projects. Setting up processes to ensure communication, compliance, and safety can significantly reduce the need for reworks that can cause significant delays.

              Whether monitoring cash flow, measuring performance effectively, or ensuring legal requirements are met, subcontractor management is fraught with challenges that require a dedicated focus informed by five key areas.

              These are:

              • Effectively managing the time allocated to a subcontractor to ensure no penalties are incurred
              • Making sure the quality of their work is up to specification
              • Providing them with a communication platform to engage with the main contractor
              • Taking subcontractors through health and safety procedures and
              • Ensuring they have secure access to the building site

              Using specialized construction software, such as RIB Candy and BuildSmart, means main contractors have one source of project data to draw from. This eliminates duplication, creates data integrity, and eliminates errors, which are familiar consequences of managing subcontractors manually using platforms such as MS Excel.

              Recording, storing, and managing this data digitally means previously complex reviews, such as subcontractor costs and performance per contract, become easier, faster, and more accurate. These systems also help to dismantle traditional workplace silos and ensure that the deeply insightful data produced by contractors is shared in uniform and easily understandable formats across all levels of the business, where required and with controlled access rights.

              Access to real-time, accurate data is essential for management teams in the construction, mining, and industrial sectors to make informed, fact-based decisions that grow their business. RIB Software is inherently built to support this ease of decision-making. If you are ready to experience all the benefits mentioned above, get a demo for RIB’s toolkit today!