Six Steps to Successful Subcontracting

As your Melbourne commercial contractors, we’re dedicated to providing our clients with unmatched services and the best value per dollar spent within the industry. With the vast knowledge of our project management experts, we help to keep projects on schedule and delay-free. An important part of keeping a project within budget and on schedule is the successful management of subcontracted work. General contractors must be selective when it comes to choosing their subcontractors. Finding subcontractors that uphold the same standards as your own company is critical to the successful completion of a project, and just as in every part of construction, general contractors must do their due diligence.

By prequalifying contractors it helps to reduce the risks that could impact your project or business if a subcontractor were to default or provide poor work. Oftentimes general contractors have a set choice of subcontractors that they routinely do business with, but if your regular subcontractors are unavailable or if you’re taking on a project in a new area, you’ll have to search for new subcontractors. Here are some important things to look for when prequalifying new subcontractors:

General

When prequalifying new subcontractors, you’ll need to collect some basic information such as company ownership, management information, number of employees, and where they have contractor licenses. Learning about the size and scope of their typical projects is an important starting point for vetting new subcontractors.

Safety

Maintaining your company safety standards is critical when looking at new subcontractors. You’ll need to get their OSHA 300 information, look at whether they’ve had any citations issued, and look at their Experience Modification Rate for the previous three years. It could also help to ask about their training program and if they have regular safety meetings.

Surety

You should ask about your potential subcontractor’s current surety provider and agent contact information. Make sure to ask about their bond rates, single project bonding capacity, and their aggregate bonding capacity.

Financial

As a general contractor, you’ll have to find if the subcontractor has ever filed for bankruptcy and ask for their Dun and Bradstreet number if they have one. It’s also fair to ask for other financial information such as their current year revenues, total and current assets, net equity, current liabilities, and average monthly billings.

Litigation

You should determine if the company or if any of the owners have any active litigation. If the company has had any labor law violations, has had their license suspended, or if the company has had any judgements filed against them, you should find out. You should also look into if they’ve ever had any contract defaults or if they’ve ever been terminated from a contract.

References

Ask your potential subcontractors to provide you with a list of three or four references that can speak to the quality and standard of their company and employees. Talking to their references can also help you to get an idea of their reputation and creditworthiness.

There are many benefits to working with subcontractors, but there are also many risks. Subcontractors should help make your job easier, but to get the most out of your subcontractor relationships, there are a few things to keep in mind:

  • Prequalification: Taking the time to properly vet those you’ll be working with will help minimize problems down the road. Take a look at their licensing, experience, safety record, legal history, management, and more.
  • Set expectations: Make sure that your subcontractors have a clear understanding of how you operate on the jobsite and the quality of work you expect.
  • Have a plan: Have your subcontractors included in your plans for safety talks, workflows, material deliveries, and all other necessary operations of your project.
  • Communicate: While this may seem obvious, clear communication can fall by the wayside during a busy project. Have frequent checkins with your subcontractors to make sure their work is going as planned, to ask about potential issues, and to give feedback.

As your commercial contractors, we work to ensure the highest quality work for each and every job we complete. Our construction and engineering professionals collaborate to provide our clients with reputable design and build services from beginning to end. Having properly vetted and high quality subcontractors is just another important part of a job well done. To learn more about how MEC can help you complete your next commercial construction project, contact us today.

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