Section R
Subcontracting
The whole difference between construction and creation is exactly this: that a thing constructed can only be loved after it is constructed; but a thing created is loved before it exists.
Gilbert Keith Chesterton, Preface to Dickens's Pickwick Papers
Reasons for subcontracting are as follows:
- The specialist nature of the work
- A weakness in one's own organization
- In order to share or reduce risks
- Productivity of the labour force
- Competitive advantage.
Subcontracting (see Part III, Section C Issuing an Enquiry) will be the responsibility of either engineering for specialist design services or construction for site work. Both situations require the project manager's (and maybe the client's) approval, and the following questions should be addressed.
1 Questions to Ask Before Subcontracting
1.1
Are you certain that the proposed work is outside the resources of the company?
1.2
Could the company hire temporary resources to plug the deficiencies?
1.3
Are there a sufficient number of competent subcontractors capable of performing the proposed work?
1.4
Will the company have adequate experienced personnel, both technical and commercial, to supervise or manage the subcontracted work?
1.5
What additional work will the company have to perform in order to support the subcontractor?
1.6
Will the proposed construction methodology be acceptable to the subcontractor?
1.7
Can the subcontractor carry out the work in accordance with the project programme?
1.8
Will the use of a proposed subcontractor cause an industrial relations problem?
1.8.1
Will the subcontractor's management buy into your industrial relations policy?
1.9
Will the client want to get involved?
1.10
Will the client agree to the use of a proposed subcontractor, or will the client want their own choice to be used?
1.11
Is the proposed subcontract work within the budget? Can the project afford the extra costs involved in subcontracting?
1.12
The fundamental question(s) that must be answered is: what can the subcontractor do better than the company? Will the subcontractor be more effective and efficient than the company?
2 Contracting Checks
2.1
Key criteria in selecting subcontractors should be the application of innovative techniques and modularisation – not just the bottom‐line cost.
2.2
Make sure that the terms and conditions for subcontractors are prepared on the basis of the master project contract between the client and your company.
2.2.1
Insert a dispute clause that binds the subcontractor to the same dispute resolution process to which you are bound.
2.3
The subcontractors must be made aware, at the time that they are asked to tender, of any overriding labour agreements at the site, together with the facilities and common services to be provided.
2.4
Ensure that the subcontractor's management undertake safety inspection audits and that the contract and the safety plan responsibilities match up.
2.5
Get the subcontractor's input to the project schedule in order to get ‘buy in’ to meet the schedule.
2.6
Make sure that all matters have been finalised/released by the subcontractor before closing out with the client.
3 Management Issues
3.1
See paragraph 1.4 in Section Q.
3.2
Some companies use field engineers to manage subcontracts and some companies use quantity surveyors.
3.3
Make a register of authorized signatures and authority limits for subcontractor representatives.
4 List of Some Subcontracts
- a. Site survey
- b. Ground conditions survey
- c. Specialist ground treatment/piling
- d. Bore holes
- e. Construction of camp site
- f. Services for camp site
- g. Household and food supplies
- h. Security
- i. Transport/cars/minivans/busses
- j. Air freight
- k. Shipping
- l. Courier services
- m. Supply and maintenance of site office equipment
- n. Rubbish removal
- o. Medical services
- p. Emergency evacuation
- q. Laboratory testing for materials/water quality
- r. Site clearance
- s. Temporary facilities
- t. Construction equipment/supply of tools
- u. Scaffolding
- v. Heavy lift equipment
- w. Civil work
- x. Specialist civil work/cooling towers/chimneys
- y. Special foundations
- z. Concrete reinforcing bar
- aa. Rail sidings
- bb. Storage tanks
- cc. Pipework fabrication and installation
- dd. Radiography/welder testing
- ee. Equipment installation
- ff. Structural steel supply and erection
- gg. Electrical and instrumentation
- hh. Permanent buildings
- ii. Heating, Ventilating, and Air Conditioning – Refrigeration
- jj. Connections to public services
- kk. Cathodic protection
- ll. Insulation
- mm. Painting
- nn. Landscaping and Fencing.