We recently touched on how hiring the right subcontractor can help out your bottom line. In this blog, we want to touch on the best practices for vetting any potential subcontractor and some of the red flags that might help you decide to look elsewhere.
There’s no denying that finding the perfect subcontractor can have a tremendous effect on the overall success of a project. Whether big or small, your project is important. So, finding someone that understands the importance and helps to get the job done efficiently is a must for any general contractor.
When you are considering who to hire as a subcontractor, keep these things in mind to make sure that they are the best option for your project.
1.) Credentials and Work History
This is more of a preliminary qualification than anything. Request a report on the subcontractor's licenses, history, management, expertise, and references. You might also check public records for things such as lawsuits, complaints, and bankruptcies.
Much like hiring a new employee, you have to first determine if they are even qualified to do the job before you determine if they are the right fit. Once you know that then you can move on to other qualifications.
2.) Safety History and Policy
You don’t want to work with anyone who doesn’t make safety a priority. Check OSHA records and time and losses due to accidents. Also, be sure to look at their safety protocols and find out who is responsible for monitoring and prioritizing safety.
Without having a clear understanding of a subcontractor's safety history and policies, you run the risk of exposing yourself to liabilities. If an inspector finds that your subcontractor isn’t following safety practices and shuts down your job site, your entire project will pay for it.
3.) Workforce and Equipment
If you want quality work from a subcontractor, they need to have quality employees. Are they permanent or temporary? Are they experienced or new? What are their age groups? How many employees do they have? These questions will let you know if they have the experience that you need to complete the job.
Younger and older workers are statistically more likely to be injured on the job and newer workers are more likely to lack the right tools and equipment to properly do the tasks you have for them. By having a clear understanding of a subcontractor's workforce you’ll have a better understanding of whether or not they can handle the project.
4.) Bonding and Insurance
Every subcontractor is required to have insurance, and in many states, they are also required to have bonding. If you (the general contractor) are required to have bonding, your subcontractor should also be bonded. They should also have workers' compensation coverage to protect employees for the duration of the project.
Ask your potential subcontractor to provide proof of insurance when qualifying them. If the subcontractor doesn’t have these protections in place, you could be held liable if there’s a problem.
5.) Written Contract
If the potential subcontractor has passed all of the other qualifications listed above, the final step is to write up an agreement. You must protect your investment. Every project should be bound by a contract that lines out the scope of work, timeframe, and payment arrangements.
Clearly outline what is to be provided by you and what will be provided by them (i.e. materials, warranties, cleanup, etc.). You should also detail the insurance requirements and indemnity agreements.
Every project is different, as is every subcontractor. But one thing that remains the same for every project and contractor alike is the need for someone that represents your business well and doesn’t increase risk or financial burden. By thoroughly considering each of the steps above you will ensure that the next subcontractor you work with is the right subcontractor and your project will be well on its way to a successful completion.
Finding a good subcontractor is important to keeping things on your job site moving smoothly. But in order to keep things in order while completing a project, you need to properly maintain your job site. Download our Proper Job Site Maintenance Checklist by clicking the link below.