How to find and select right subcontractor for your construction project
So often, contractors hire subcontractors, who then jeopardize their schedule and budget. They promise to deliver something in one month, and after three months, you still see them and are forced to deal with them. Large general contractors like Skanska have their own database of subcontractors. They have their own techniques for quality control and inspection and their own standards for what should be checked before accepting him as a vendor or subcontractor. Even when agreements are made, they still do control checks once the work is ongoing. Choosing the wrong subcontractor that doesn’t bring results can be very expensive. Let’s see where you should pay attention when choosing the right subcontractor.
OK, let’s imagine you find your subcontractor. From their homepage, you can see they have been working with large general contractors. Great, everything seems legitimate. But don’t fall into this trap. It is good to see that potential subcontractors have worked with many known contractors, but before hiring, ask him for references. Call them, see how everything went, whether they suggest them, and ask some of these questions:
- What scope of work did they perform?
- Did they deliver on time?
- How was the communication?
- Names with whom they worked?
- How was the quality?
If the reference person doesn’t want to talk, that’s fine, because if something really went wrong with these subcontractors, he will have time to let you know what they did.
Are they experienced?
There are so many jobs in construction and so many different materials and techniques. Being a contractor doesn’t mean he can do everything. Contractors who are bad at what they do will agree to any job you ask them to do. You have to keep in mind that contractors have their own unique specialties. You can find a trade contractor who is experienced with flooring, but your job is to install terrazzo floors, and he hasn’t done it before. You should probably research how complicated your task is and whether it is ok to hand it over to someone who isn’t experienced. If he isn’t experienced, ask how he would execute the work?
Ask for an execution plan
By asking a simple question like “How are you planning to execute the work? Tell me pointing out the steps,” you can get an idea if he is the right one. You have to know his plan, and experienced guys can answer these questions easily:
- Where he will buy the material,
- How he will produce material
- Does he have any questions about drawings? (No questions are a red signal, and he will have lots of questions once he has executed the work. Experienced guys will always have questions.)
- How many people will be involved?
- Who will manage the work (if the person with whom you speak will not manage the work, try to speak with one who will; you need him, not a sales guy),
- How much time will he need to execute the work,
- Is there anything specific he needs from you?
- What potential problems or risks he sees (this is really good if he sees some problems; it means he has studied your scope and is probably the right guy),
- Is there anything he would like to change or improve (again, if he has something to add, that is great)?
Overall, if you see that your potential subcontractor is active, asks you questions about how to execute, and offers some solutions, this is a good sign.
Does he have valid certificates?
Check your scope, and check whether it must be installed or produced according to specific standards. If yes, then this must also apply to your subcontractor. You should also check whether he has valid other licenses and certificates that are needed in order to execute and perform works in your country and scope. This can be checked with local authorities and building codes.
Cash flow issues
If your subcontractor is facing cash flow issues, you’d better run and forget about him. If he is having cash flow issues, he will do anything to get your deal in order to inject your money into a previous project, which he can then finish and use that money to start your project. But in order to finish your project, he will need an upcoming project. Basically, subcontractors at this point are having a rat race, and you can become his hostage because you paid and you want delivery from him, but you can’t do anything with him because he doesn’t have cash. Check if your subcontractor has any open claims about taxes or whether he has opened cases with insurance companies. Maybe, if possible, you can call some of his material suppliers; they will not say anything, but if he is delaying payments and in pain, they will speak. If you make advanced payments, ask for some insurance.
Use of construction software
Check what construction software your subcontractor uses. If he doesn’t use any, you should ask him how he plans his works and if he has ever used any. Where he schedules his project and where he keeps his drawings, how organized is he? Lack of use of construction software is not a red flag, but he might face inequities and the work might not be organized well.
We could talk about this topic for hours. I have gone through many good and bad deals, and with every new bad deal, you come up with something new. But the main recommendations would be to check for references, talk with others, and listen to what they say about your potential subcontractor. Ask him how he will execute your works, does he have experience, and check if he is having cash flow issues. Definitely avoid them if your subcontractors face large cash flow issues.