How To Manage Subcontractors: A Complete Guide for Construction Professionals

Table of contents

• Understanding the Role of Subcontractors in Your Business
• Creating a Comprehensive Subcontractor Manual
• Establishing Clear Communication Channels
• Setting Expectations and Deliverables 
• Monitoring Performance and Quality Control
• Setting and Enforcing Safety Standards
• Building Strong Relationships with Subcontractors
• Navigating Legal and Contractual Obligations
• Effective Conflict Resolution Strategies
• Utilizing Technology for Better Management
• Evaluating Subcontractor Performance and Feedback
• Best Practices for Onboarding New Subcontractors

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Even the most skilled project manager can't do everything. From electrical work to plumbing to drywalling, you need to bring in experts who can do great work at a large scale. 

Subcontractors are experts in particular areas of construction hired by project managers to build and install parts of the project. There are subcontractors for nearly every aspect of a project, from steelwork to windows to concrete. How many you need depends a lot on the specs for your project. For a massive office building, you might be looking at over a dozen, while for a small-scale project, you can get by with only a few. 

When you start dealing with multiple subcontracting companies on a single project all working together with very tight deadlines, it can get pretty tricky pretty quick. To get a handle on how to manage subcontractors, let's work from an example. Suppose you are starting on a 10-story apartment building in a major urban center. It's a lot to do, with dozens of subsystems and complicated processes. Before we get into how to manage subcontractors in construction, it's important to understand the role of subcontractors in projects like this. 

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The primary role of a subcontractor is to use their specialization and expertise on your build site. No single person knows how to do every part of a huge project like an apartment building.

Generally speaking, subcontractors are there to come in, do their part of the project, and pass it off to the next phase of construction. This saves a lot of money since you don’t need as many full-time workers. But, the price of subcontractors has gone up in recent years in large part due to increasing material costs. What's important to remember is that you'll cover the materials cost regardless of who's doing the installation.

The other main role of subcontractors is mitigating risk. A good subcontractor comes with experience in dealing with the dangers and nuances of their specialty for decades, which makes them a much smaller safety risk than trying to figure it out on the fly. 

With this overall understanding of what subcontractors are there to do, let's start breaking down how to manage them effectively. 

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To streamline operations and set clear expectations, it's beneficial to develop a comprehensive subcontractor manual. This manual should include project-specific safety protocols, reporting procedures, and quality control expectations. Ensure that every subcontractor receives this manual during onboarding and uses it as a reference throughout the project. A well-documented system reduces miscommunications, minimizes delays, and holds subcontractors accountable.

However, simply having a well-structured manual is not enough. Clear communication is essential to ensure that the expectations and protocols outlined in the manual are followed consistently throughout the project. This brings us to the importance of establishing effective communication channels with your subcontractors

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As a first step in a subcontractor management plan, it's imperative to establish clear communication channels. To communicate subcontractor scheduling, creating a shared platform is essential. Set up easy-to-use scheduling and field coordination software that alerts subcontractors to changes as they happen. You also need to establish a system for submitting subcontractor daily reports so you can track progress as a whole. For example, if we get updates about delays from the electricians, we know to not bring in the HVAC install subcontractors until that's finished. 

Daily informal morning meetings can help the on-site crew, while weekly progress reports through technology keep stakeholders informed. Be sure to plan for the unplanned. Suppose a subcontractor crew accidentally hit a water main during the construction. Establish an emergency contact list with all key stakeholders and a public relations plan for situations like that. You don't want to be throwing that together after there's water gushing into the street.

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Use that clear communication to establish a rock-solid understanding of contracts before you get into the project. In addition to knowing deadlines, subcontractors need a clearly defined scope of work that outlines their responsibilities. Each subcontractor should have a detailed job description that connects to project-wide objectives. Linking these scopes of work to measurable performance indicators (KPIs) – like completion times, adherence to budgets, and quality benchmarks – ensures accountability and smooth coordination among teams. In our apartment example, these KPIs would include deadlines for framing, electrical systems, and HVAC installations, all of which must align to avoid bottlenecks.

Take the time to walk subcontractors through every aspect of contracts and make sure they understand expectations. Shooting off an email or a text doesn't necessarily mean a subcontractor fully understands the project. Setting expectations is essential because there will be multiple subcontractors on-site at the same time, all working on interconnected systems. One misunderstanding could have a domino effect on the rest of the project.

When it comes to setting expectations in subcontractor management, project scheduling software is also a big help. It moves deliverables and deadlines from contracts to an interactive schedule that subcontractors can access.

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Even if you are working with a top-notch subcontractor, monitoring performance and quality control is essential. This applies to the quality of the work itself, but also how it fits in with your building environment – that's why subcontractor daily reports are key. 

For example, in our apartment in an urban center, it’s not just about the quality of materials and labor, but abiding by city codes and minimizing disruption to other buildings nearby. Try and leverage technology whenever possible to streamline your monitoring procedures.  Good management software should allow you to track quality checks in real-time, and drone technology can speed up on-site inspections.

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Safety is non-negotiable on any job site, and subcontractors must adhere to strict safety protocols. During onboarding, ensure each subcontractor is aware of your project's safety requirements, including the use of personal protective equipment (PPE) and adherence to local safety regulations. Regular site inspections and safety audits help enforce compliance, reducing the likelihood of accidents. Clear communication about safety standards protects not only workers but also the project's overall timeline.

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Trust is a huge aspect of successfully working with subcontractors. Over time, you'll likely build trust with subcontractors over multiple projects. It's a mutually beneficial relationship. They can rely on you for steady work, and you can rely on them for high-quality craftsmanship. In our apartment complex example, you need subcontractors you know can work in the limited space of an urban center. Urban construction means avoiding damage to buried infrastructure and neighboring buildings. Working with subcontractors with an established track record goes a long way in getting the project done well. 

Adopt a strategy of promptly and professionally resolving any issues to keep relationships strong. Remember, even if a subcontractor is a new partner, there's the potential they could be working with you for years to come.

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In an example like ours, this can be particularly tricky. A downtown area means you are dealing not only with state but also county and city ordinances and zoning laws. Then there are the specifics of how the contract works as well. While a few may be old school and settle on a verbal agreement and a handshake, most subcontractors today want written contracts in case something goes sideways.

To manage these issues, consider talking to legal counsel, and work to stay updated on local regulations. It's also important to require subcontractors to prove their insurance coverage before starting work on a project – the last thing you want is to get tangled in a busy city's court system should there be a liability issue. 

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The truth is that conflicts are going to happen on any large-scale project. It might be between you and your subcontractor, or multiple subcontractors, but at some point, there are going to be issues. The key is to get ahead of the ball. Beyond dispute resolution, implementing a proactive risk management plan is essential. This plan should anticipate common risks such as scheduling conflicts, weather delays, or subcontractor underperformance. Establish a clear process for addressing these risks and set aside contingency funds or backup subcontractors to step in if needed. Regular risk assessment meetings can help identify potential problems before they escalate, ensuring the project remains on track.

Designate a moderator for disputes, a chain of command, and rules of conduct. This can be a clause in your contract, or just a conversation you have with your subcontractors, but setting this up beforehand goes a long way in cooling down a situation.

Also, be sure to communicate openly and honestly and avoid assumptions. There are a lot of people working on a project, and it is very easy to get wires crossed. Make sure you understand exactly what's going on before trying to resolve anything. Take a beat to look for common ground as well – usually, that's the fastest way to a mutually beneficial solution.

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It’s possible to manage all the subcontractors on a complicated large-scale project with just an Excel sheet and great note-taking skills – but why would you put yourself through that? Even a small mistake in scheduling can set off a chain reaction that throws the whole project out of sync. 

Adopt a strategy of ensuring subcontractors know what to expect before they get on site. Good lookahead software is key when juggling multiple subcontractors, and with the power of technology, you can do far more than just scheduling. Real-time performance tracking tools, like iPad apps and cloud-based platforms, allow project managers to monitor work progress, ensure subcontractors meet deadlines, and quickly identify areas that need improvement. Drones can be used to inspect hard-to-reach areas, providing instant feedback on work quality. The integration of these tools ensures that all subcontractors are held to the highest standards of performance, even on large, complex projects.

Mobile apps can interface with that software to let you stay in touch with subcontractors while on-site. This means that subcontractors can see their weekly work plans anytime so they don’t miss deadlines.

"Outbuild has been a game-changer for our business. As a small subcontractor, navigating schedule acceleration and managing deadlines with larger GCs became a whole lot smoother. The ability to build look-ahead schedules directly from the master schedule and provide real-time updates on progress has been invaluable. No more keeping our field team out of the loop. I can confidently say that Outbuild has reduced rework, enhanced project performance, and saved us significant time. Its user-friendly interface has streamlined our collaboration, making my role a lot less stressful and a lot more productive."

Matt Yager
President at Yager Electric

See How Yager Electric Transformed Project Management — Case Study.

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We've already talked about the importance of monitoring performance and quality, but you need to think about how you're going to evaluate that information once you get it. It's important to stay on top of performance reviews with our subcontractors and give them actionable feedback to help them improve. 

Useful feedback is a lot more than simply saying “Good job.” Try breaking down your evaluations into actionable criteria – things like meeting deadlines, communicating with stakeholders, and quality of work on site. In our apartment building example, suppose the HVAC team missed several important deadlines. Just telling them that they're not doing a great job isn't very helpful; be specific about it. They can’t improve if they don’t know where there’s a problem. When things are good, be sure and let them know –  this will help them know they're on the right track and boost morale. 

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In a perfect world, you'd start a project with trusted subcontractors available for the duration of the project. But, that’s usually not the case. Even if you have subcontractors you trust to do great work, the chances of them being available when you need them are slim given the demand for specialized construction work. So, you need to look at how to onboard new subcontractors.

The first step is to pre-qualify as many as you can through thorough background checks, financial health assessments, and references. Ensure subcontractors have a solid track record, including their experience with similar project sizes, safety records, and compliance with local regulations. Reviewing their past work performance and checking references helps mitigate risks and ensure a smooth project timeline. It's also critical to assess their financial stability to avoid disruptions caused by subcontractor insolvency midway through the project.

You also want to give clear expectations; remember, they don't know how you work yet so assume nothing. It's also important to give as much support as you can. let them know you are there to fill them in when they need it. You can give this information out in some kind of welcome packet or a series of meetings to get subcontractors up to speed on the nature of the project, how it's going so far, and what you are looking for.

Making a subcontractor management plan for a big project is incredibly complicated. But if you take the time to find the right subcontractors and take advantage of the tools to manage them well, you can tackle projects of any size.

If you’re ready to start streamlining your subcontractor management, schedule a demo today to see how Outbuild can transform your projects or check out Outbuild’s 14-day free trial.

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