March 7, 2019 in Analysis
Effectively Managing Subcontractors


Most of the contracts in the construction industry are comprised of numerous parts. There are particular people who are best suited for every job. This means that the prime contractors have to delegate most of their duties to other people who are more experienced in the corresponding field. However, there are many cases in which the contractors do not meet the expectations of the client. For this reason, there is a great need for contractors to ensure that they manage their subcontractors appropriately. It is equally important for the clients to have vast knowledge of the issues that they are bound to face in the course of the project. 

Literature Review

There are different authors and researchers who have reviewed various aspects of the issue of subcontractors’ incompetence. In the electrical company, there are many gadgets and equipment that is required. There is a tendency for subcontractors to use equipment that is not acceptable for the completion of the project. This issue has been analyzed by most of the researchers, in order to find the ways in which this menace can be solved.

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According to Burdick, a successful project is determined by the sum of its parts. When a client gives work to a contractor, the whole supervision process is shifted to the supervisor. This means that every action undertaken during the project is bound to be allowed by the contractor. In return, the contractor has to employ a team able to provide the required results. However, most contractors review the prices of the subcontractors. If the project is worth a certain amount, it is the work of the contractor to determine how much is allocated to each subcontractor as well as the ratio with which it will be shared. The prices of different subcontractors assume a wide range for the contractor to choose. This means that some subcontractors are cheaper than others. Considering this fact, the contractors choose the subcontractors that charge the least amount for their work. In this process, they create a team that is not based on their merits, but on their prices. According to Burdick, this is one of the biggest problems in dealing with subcontractors. In the company, there are two main tests that are conducted. One of them is the Factory Acceptance Test. It is conducted in the factory to confirm if the equipment corresponds to the required level. The second one is the site experience test. This involves bringing the equipment on the site where it is used. Through such a test it is determined whether this equipment is appropriate for the particular site. Vatne claims that the clients are the ones to blame for the mess caused by different subcontractors. Jansen, who shares the same view as Vatne, emphasizes that the issue of professionalism is overlooked by most clients, when choosing appropriate contractors. In addition, most clients do not conduct follow up activities. They have no link with any of the subcontractors. As a matter of fact, Hollander’s research shows that most clients have little knowledge of the projects that they finance. Consequently, they are always unable to make judgments in the progress of the projects. The research proposes the use of professional advisors to provide the necessary information to the clients as mandatory. Therefore, they can be in a position to supervise the project alongside the contractors. Therefore, Vatne is advocating for the increased involvement of the clients in the projects in order to yield better results.

Baldwin advocates for the increased and improved use of technology while checking of subcontractors. Normally, it is believed that the contractors check their subcontractors before they are required to deliver the job. However, this is not the case in many situations. The client dies not have much power over the choice that the contractors have while choosing their contractors. Manuel, alongside Rackham, proposes a web based system of subcontracting. According to this system the subcontractors are checked online in order to establish their qualifications. It is also important that they present their past works. This can be used in determining their ability to deliver the desired results. There should also be reviews from the clients to know which subcontractors meet the requirements as well as standards required by the client. The advantage of using online services is that they are most likely to be open and fair. The reason is that the information is always available for anyone to view. Therefore, the client can be in a better position to monitor the kind of subcontractors that are working with the contractors. In addition, the clients can receive the views of the professional advisors after viewing this evaluation of subcontractors. This seems to be a view of most of the researchers. 

Conceptual Model

After conduction of this research by different authors, there is a need to establish a conceptual model based on the findings of the research. The first issue is that the hierarchy in the project should be as clear and inclusive as possible. On the part of clarity, it means that every person should realize the power he has as well as responsibility for any decisions. This prevents the misuse of power by any of the parties that are involved, especially the contractors. On the part of inclusiveness, it is important that this hierarchy starts with the client. The client should not allocate resources to a project that he cannot supervise. Therefore, there is a need for the inclusion of the professional advisors. In the construction industry, there are many contractors who are not professionals. The fact that they are financially successful and within the reach of resources makes clients attracted to them. With a professional advisor, it can be easier for the client to know if they are allocating the project to the right contractor. Otherwise, the results would be detrimental. For an electric company, mistakes cannot be afforded. The reason is that it can cause hazards to the clients and subsequent costs to be compensated. Finally, the company will lose more than earn.

With the improvements in technology, it is impossible for any company to ignore it. The web based evaluation of subcontractors is one area that can make maximum use of the Internet. Mostly, the completion of a contract is between a client, the contractor, and the subcontractors. However, another party can be involved into the equation. This would be the government. When hazards occur, resulting from the lack of competence of the subcontractors, part of this fault is translated to the government. Any government has the obligation to ensure well-being to its citizens. The advantage involved with the government is that it has the ability to control most of the abilities and jurisdictions of its citizens. Combined with the use of technology, the government can establish a system for evaluating subcontractors. This can aid in the protection of the clients from any signs of danger. Alternatively, the particular company can introduce laws that are used to choose the subcontractors for particular projects. Definitely, most contractors review the prices of the subcontractors before making any decisions. However, they should consider the professionalism of the parties that they choose. Taking into account these two factors, the company should establish the balance between the prices of the subcontractors and the professional qualifications of each of them.

Apart from professionalism, there is a need for coordination between different parties in the execution of any contract. This communication should be mainly between the contractor and the subcontractor. The conducted research shows that most contractors are able to work best with the subcontractors that they have worked with for a long time. The reason s is that they have worked together and understand each other. Therefore, there is a high possibility that each of them can bail the other from a problem that may accrue while implementing the project. In addition, they are able to perform their functions as a team. This is one of the most important factors in the evaluation of the results achieved at the end of the project. There is one major deduction that can be drawn from this situation. For most clients, the projects that they undertake are for the first time. This shows that they do not possess enough information on the issues that are involved. Therefore, most of the major decisions are made by the contractors. The major point is that the contractors should be allowed some freedom. This is to aid in the choice of the best team for the delivery of the required standards in the project. However, this freedom should be limited, in order the contractors follow the major reason why that power was allocated to them. They should always know that the clients support them with the help of a professional advisor. Therefore, they would ensure that they manage their subcontractors effectively. Concerning input into the project, this graphical representation shows the four parties that are most important for the completion of a project. In addition, there are hypothetical figures used to show the order of their importance for the completion of the project. Neglecting the hierarchy or omitting any of the four parties can prove to be disastrous to the result of the project.

List of vital parties in a project and their order of importance

List of vital parties in a project and their order of importance

Data Collection and Analysis

From the proposed model, there were various researches conducted in order to define real figures of the way in which different parties handle the issue of subcontractors. The research showed that more than 90% of the clients do not know the project that they allocate to other parties. This means that most of the clients are not actively involved in the actual project. Instead, they just release the funds that are required for its implementation. Consequently, they wait for the final results. This is a problem that should be eliminated by the use of professional advisors. In return, these professionals can be included into the hierarchy of a project. In the case where the clients are ignorant, the company receiving the contract should be responsible for their education. It is unfair to construct a house for an individual who does not know how the house should be designed. This also applied to electrical appliances. Clients should be aware of the risks that can be caused by the lack of awareness of the problems that can result from use of inappropriate and incorrect equipment.

Research also showed that more than 60% of the contractors use the same subcontractors over the years. It also displayed that most subcontractors prefer to deal with the same contractors as long as there is a task to be completed. Consequently, there is real comfort when familiarity appears in the workplace. This is when the people working together are familiar with the ways in which each of them performs his activities0. When a contractor has completed several projects with a subcontractor, he is able to establish his reliability. According to the above-mentioned facts, the final result is totally dependent on the sum of its parts. For most of the projects that are completed, the result is based on the familiarity of the parties involved. Finally, the involved parties share the profits in the ratios that are agreed before the contract commencement. Most of the issues are solved positively because they share their collective experiences in the completion of the project. However, this does not mean that the contractors should be given absolute freedom concerning the choice of the subcontractors.

In the research it was discovered that more than 40% of construction companies had put much interest in the acquiring of the new technology on the market. This technology has been used while advertising most of these companies. As a matter of fact, most CEO’S have stated that technology defines the future of the construction industry. The deduction from this fact is that one can try to solve any problem through the use of technology. For example, the evaluation of the contractors can be Web based. Moreover, the monitoring of these subcontractors and their job progress can be conducted online. This would aid in creating a comfortable atmosphere between the clients, contractors, as well as subcontractors. When the regular inspection is initiated in the process, there is a high chance that the client can identify any faults that have occurred during the project implementation. However, he will need the presence and advice of a professional expert.

Conclusion and Recommendations

From the research above, the following conclusions can be made. First, it is clear that the team being used for the completion of any project should be one unit. They should work together if they want to achieve any valuable results. The neglecting of duties on the part of subcontractors translates from the neglecting of duties from parties higher in the hierarchy. First, it results from neglecting the duties by the clients and that by the contractors. If a subcontractor faces the risk of losing his job due to delivery of poor services, they would not engage in acts that would put their job in jeopardy. Instead, they would do their best to ensure that they fulfill their duties as they are required. Moreover, they would completely satisfy the clients and receive their payment. 

The other conclusion is that there is a high probability of hiring subcontractors that are not professionals. If they are professionals, these subcontractors may be incompetent in the jobs that they deliver. Therefore, the recommendation is the possibility to involve professional advisors in the project. These professional advisors may require extra cost from the clients or the contractors. However, this action is necessary. It ensures that the client is always informed about the actions that are implemented throughout the project. Regarding the contractors, professional advisors can aid in their selection of the subcontractors. This ensures that all the subcontractors chosen achieve the required specifications. However, it is vital to remember that some degree of freedom has to be offered to the contractor. This is to ensure that they are able to choose a team that they find comfortable. When this is achieved, all the activities in the project run smoothly. Therefore, a mixture of various balances between the parties involved should cause the completion and success of any project. When an electrical company is able to achieve this, it is halfway through the delivery of quality services as well as products to its clients.



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