The world of contracting often has many layers that really help highly complex projects that require a wide range of specialized skills. But, when subcontractors start hiring subcontractors of their own, complexity ramps up.
There are many ways your project can go sideways when subcontractors start involving their own subs. But, many general contractors mistakenly assume that bid lists, contract language, bonding, and insurance will handle all the issues that might arise from having sub 鈥渟ubbies鈥 on the project. In short, you鈥檙e putting a lot of faith in your subcontractors to act in your best interest, and to do it timely.
Many owners require a list of subcontractors at bid time along with the names, addresses, and project role of any sub subbies. It鈥檚 always best to know who鈥檚 performing on your projects, but these lists by themselves do little for the contractor beyond that. You still need to qualify subbies so you know that they can do the work, and they won鈥檛 be bringing unnecessary risk to your project.
Here are some of the issues you may face:
Violating Contract Requirements
If there is a contract, and whether sub subcontractors are mentioned or not, everyone on the project poses contract violation risks to you. For example, court cases have found general contractors in violation of contracts for failing to properly select and.
Violating Labor Rules and Regulations
This area is becoming increasingly complex. Recent rulings and court findings have elevated for hiring, classifying, and paying labor. The issues of immigration and the evolving views on classifying people as independent contractors also bring new complexity to this area.
Losing Control of the Schedule
Delays, clashes between subcontractors, and excessive time on activities are just a few of the issues that multiply when sub subbies work the job. Lack of authority over the sub subcontractor often amplifies the problem. Without clear contractual terms and project management practices that reinforce the general contractor鈥檚 role, it鈥檚 not unusual for the sub subbie to end up driving the schedule when their work must precede other work.
Losing Control of Safety
One accident is one too many. Sub subbies arrive at the job with varying degrees of experience. It鈥檚 often the case that they are new to a construction jobsite with all of its moving parts and dangerous scenarios. An accident at their level reverberates up the chain. If they are not up to speed on safety aspects that are particular to the jobsite and to their roles, safety risks rise quickly.
Losing Control of Quality
Sub subbies usually work on very detailed portions of projects. These detailed portions sit at the bottom of a long list of work that happens once the sub subbie finishes up. There could be a ticking time bomb that might not go off until layers of other work are completed.
But it鈥檚 in the Contract
If you are running a project where contracts prevail, there are very specific. While these clauses provide some peace of mind, you should remember that contract protections will lag events. The contract clauses won鈥檛 protect you from the negative actions of sub subbies. They just provide a course for legal remedy after the damages have already happened.
The legal recourse offered to you on contracts using contractual wording from sources other than the AIA, varies wildly. Some 鈥渇orm鈥 contracts might only lightly touch on sub subbie aspects while others might not mention them at all.
The rule of thumb applies: Read and understand the contracts you鈥檙e signing, and if you don鈥檛 understand them, get legal counsel.
Remember though, no matter the source of the contract wording, there is no protection in them from negative events happening, just the opportunity for legal recourse when they do. This holds true for insurance and bonds. By themselves, they aren鈥檛 going to prevent the issues brought to the job by sub subbies.
If you work on small projects with little to no documentation, and no written contracts, then the sky鈥檚 the limit on the damages you might experience from sub subcontractors. Even worse, you will have questionable ability to do anything legally to recoup your losses. With a contract though, at least everyone has responsibilities to adhere to.
Ideas for Preventing Sub Subbie Problems
At the outset of any project, it鈥檚 important to have very clear roles and responsibilities laid out. During the bid stage, when you specify your requirements regarding sub subbies, make your intentions known. Getting a list of all sub subcontractors at bid time gives you a chance to qualify them so you not only know who is working on the project, but also their qualifications, experience, and track record.
A contract that addresses sub subbies by assigning responsibilities will help set the framework needed to minimize disputes and streamline interactions among the various project participants. Taking on any project with just a handshake where you rely on others to fulfill portions of the work is front-loading your portion of the project with extra risk.
Double check the schedule for sub subbie involvement and note the resources assigned. Are they realistic and complete for the workload? If this type of information is missing from the schedule, there鈥檚 a good possibility the sub subbie鈥檚 role hasn鈥檛 been thoroughly figured out by the supervising subcontractor.
While you鈥檙e at it, check your list of quality control inspections and at least initially make sure you鈥檙e checking on sub subbie work. You aren鈥檛 expected to give them direction, but you should be aware of how they are performing. When you see issues, bring them up to the responsible subcontractor and insist on answers to your questions. Once you are comfortable with performance, you can take a more hands-off approach and check on things only at critical junctures.
If you are running a job and sub subbies start showing up unexpectedly, find out why. If the subbie isn鈥檛 listed, your subcontractor is exposing you to risks that you didn鈥檛 sign up for. If you鈥檙e on a small job with no contracts, then you鈥檙e flying by the seat of your pants. Most likely though, you already know that and don鈥檛 mind the risks. But, you can check the work regularly, institute safety requirements, hold off on payments until work is in place, and put the subcontractor on notice that you鈥檒l consider their subbie鈥檚 work when you judge their performance. You could also try to put contracts in place for the remaining work.
Sub subbies fill a vital role and they bring much needed extra skills to complex projects. Just make sure you take steps to reduce potential risks.
To learn more about how to reduce risk on the jobsite, be sure to check out the following eBooks听补苍诲听case studies:
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