Subcontractor Management: A Comprehensive Guide
1. Subcontractor Resource Requirements
To determine subcontractor resource requirements:
- Review the contract, drawings, and specifications to understand the construction type and expected end product.
- Develop a plan and schedule to determine the necessary resources, quantities, and completion time.
- Gather input from key personnel and stakeholders to establish quality expectations and budget constraints.
- Consult with potential subcontractors to assess their suitability for the project, considering quality, time, and budget parameters.
2. Defining Subcontractor Requirements
Clearly define subcontractor requirements, including:
- Type of contract
- Variation clauses
- Scope of work changes
- Timeline adjustments due to unforeseen circumstances (e.g., inclement weather)
Develop a comprehensive Statement of Work (SOW) by:
- Defining the project scope and breaking down the work into major components and deliverables.
- Organizing the work systematically using a Work Breakdown Structure (WBS) to create manageable sections.
- Identifying and specifying deliverables expected from the subcontractor, including purpose, description, and instructions.
- Documenting the SOW in a format suitable for distribution to potential subcontractors.
3. Task Analysis for Subcontractor Selection
Conduct a thorough task analysis to define the competencies required for the project. The SOW should detail:
- Scope Definition: Clearly outlining all work to be performed by the subcontractor.
- Deliverable Criteria: Defining acceptance criteria for deliverables to prevent disputes.
- Contract Terms Definition: Providing clear definitions for terminology used in the contract.
- Documentation Requirements: Specifying required subcontractor documents, content, and submission deadlines.
- Subcontract WBS: Defining the specific work to be performed by each subcontractor within the project.
Ensure the WBS includes all tasks to be completed.
4. Determining Subcontractor Type and Number
Utilize a Project Management Plan (PMP) to define project execution, monitoring, and control. The PMP should:
- Outline the organizational or project structure, including personnel, subcontractors, customers, and users.
- Define the project delivery approach and work allocation for each phase and entity.
- Clearly identify the type, number, and specific roles of subcontractors required for the project.
Effective communication of the project structure to subcontractors is crucial, ensuring they understand lines of communication, reporting hierarchies, and their roles within the project.
5. Industrial Legislation and Contract Legal Matters
Thorough research of relevant industrial legislation is essential to ensure workplace obligations and subcontractor rights are met. Key considerations include:
- Building and Construction Industry Improvement Act 2005 (BCII Act)
- Fair Work Act 2009 (FW Act)
- National Employment Standards (NES)
- Relevant awards and agreements
Carefully constructed contracts that address these legal aspects help prevent disputes and misunderstandings, ensuring a smoother project flow.
6. Record Keeping for Subcontractor Management
Maintain comprehensive records regarding subcontractor:
- Proposed approach to undertaking the work
- Technical capacity to meet project requirements
- Project management approach
- Quality assurance processes
- Compliance and conformance with regulations and standards
- Financial capability and proposed pricing
- Track record in delivering similar projects
7. Information Gathering for Subcontractor Selection
Gather information to assess subcontractor suitability, including:
- Previous work experience and references
- Behavior, pricing, work performance, timeliness, and availability
Use selection criteria to evaluate subcontractor competence, considering factors such as:
- Relevant experience in similar projects
- Understanding of the project and task
- Past performance in previous projects
- Management and technical skills
- Available resources
- Management systems
- Proposed methodology and pricing
8. Policies and Procedures for Subcontractor Evaluation
Implement a structured evaluation process, such as a SWOT analysis, to assess subcontractors. Utilize a customized checklist to review criteria related to:
- Customer satisfaction
- Business approach
- Quality assurance measures
- Viability and risk assessment
9. Management Plan Template for Subcontractors
Develop a comprehensive management plan template that includes:
- Introduction: Outlining the purpose, scope, and approach for subcontractor management.
- Contract Organisation Chart: Defining the project’s organizational structure, stakeholder roles, and responsibilities.
- Methods for Successful Management of Subcontractors: Describing work allocation, management, reporting, and review processes.
- Acceptance Process: Outlining quality assurance, client acceptance, customer review, invoicing, and payment procedures.
10. Special Terms in Subcontractor Engagements
When contracting subcontractors, ensure clarity and detail in the terms of engagement, including:
- Contract Attachments: Providing detailed specifications and requirements.
- Terms of Agreement: Defining specific terms and conditions, including initial terms, optional terms, and outsourcing contract terms.
- Deliverables: Clearly outlining deliverables, plans, and consultancy requirements.
- Delivery: Specifying the project delivery schedule and proposed timetable.
- Acceptance Criteria: Defining standards for deliverable acceptance.
- Warranties: Outlining subcontractor warranties.
- Confidentiality: Addressing confidentiality requirements.
- Price and Payments: Specifying pricing, payment terms, and methods.
- Taxes: Clarifying tax obligations.
11. Enforcing Conditions of Engagement
Regularly monitor and reinforce the terms of engagement to ensure compliance and address issues proactively. Key practices include:
- Regularly reviewing the contract and terms with subcontractors.
- Maintaining a printed copy of the contract for easy reference.
- Addressing questions and concerns promptly.
- Using the contract to clarify situations and avoid misunderstandings.
By implementing these practices, you can establish clear expectations, foster strong subcontractor relationships, and minimize the risk of disputes or delays.