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As a contractor, managing subcontractors is a key facet of your job. But, it’s not exactly the easiest part of your job and it can be very time consuming for you.
However, you don’t have to go it alone. In fact, by creating a helpful subcontractor management plan that you can use for each and every project, you can make managing your workers much, much easier.
If you’re familiar with what a subcontractor management plan is, then keep reading for a nice refresher. If you’re totally new to the subject or are looking to get better acquainted with it, then we’ve got you covered too!
Here is a breakdown of what a subcontractor management plan is and the content that should be in it.
Table of Contents
Subcontractor Management Plan Defined
A subcontractor management plan is a guideline on how the relationship between you and your subcontractors will work for the duration of a project.
Why Are They Necessary?
SMPs are necessary because they SMPs are necessary because they help ensure that expectations and deadlines are clear for your contractors. It clearly outlines the goals and parameters of the contract so all parties are on the same page.
Essentially, it’s the methods by which you, the construction business owner, will ensure that everything is done correctly and on-time.
Content Suggestions For Your SMP
Your subcontractor management plan may include the following:
Prequalification
In order to make sure that you’re bringing aboard the most professional and best crew for the job, prequalification is necessary. While some contractors may try and avoid this step altogether simply to save time, this is not recommended.
By prequalifying your subcontractors, you can make sure that they have the experience in completing similar projects, have the certifications and licenses that they must have for their role, and that they don’t have any violations against them that renders them unable to work.
Don’t play fast and loose with who you hire, as it may come back to bite you in the end.
Insurance Considerations and Creation of Contract
Any subcontractor you are bringing on to a project should be able to provide you with proof of the insurance that is needed when working on that specific job site. Make sure that prior to the subcontractor beginning any work, you first get all insurance information squared away.
After insurance considerations, a contract should be created, which should include information such as:
The names of the parties involved in the contract:
- The legal names of the parties involved in the contract
- The scope of the work, including:
- Each subcontractor’s clearly defined responsibilities and authorities
- Each subcontractor’s deliverables identified, and required content clearly specified
- Each subcontractor’s clearly identified and described services that it is responsible for providing
- Schedule and budget constraints
- Warranty details
- Each subcontractor’s clearly defined requirements for quality, including the requirement to allow independent quality inspections of materials and processes
Safety Plan and Training
A safety plan and subsequent training are necessary and should be outlined in the SMP. It is especially important to have this safety plan in place with the current OSHA regulations, PPE requirements and worksite changes.
The safety plan should include:
- Management Commitment
- Responsibilities for Different Parties
- Safety Rules and Regulations
- Disciplinary Policies
- Accident and Reporting Procedures
- Safety Training Requirements
- Emergency Response Plan
- PPE Requirements
You should also require your subcontractors to make sure that all their employees are properly trained. When it comes to what they need training for, make sure to thoroughly outline them in the “safety training requirements” portion of the SMP.
Inspections and Review
The last portion of your subcontractor management plan should include the conducting of inspection both during work in progress, as well as post-project.
This will allow you to make sure that everything is going according to what was agreed to.
But, you should also plan for what should happen if things aren’t going as well as you’d like during your inspection (i.e. certain aspects of the project weren’t done yet, they are way behind schedule, etc.). Included in your SMP should be an outline of what will happen if during these inspections if the work is unsatisfactory.
Finances
Another important part of a subcontractor management plan is the financial aspect. This section will outline financial elements that will be monitored and ultimately can help you manage your accounting and cash flows. Some details in this section could include:
- Payment Terms agreement
- Retainage agreement
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