Category: Contracts & management
Prepared by Eng. Ahmed Fathy, Projects Manager ·
Definition
A subcontractor contracts with the main contractor to carry out a defined part of the works, such as electrical, aluminium or waterproofing. The contract is between them, and the main contractor stays responsible to the owner for all the works.
Why it matters on a project
Most projects are delivered through specialist subcontractors. Choosing them and managing the interfaces between them is a main reason a project succeeds or runs late.
Measurement and pricing
Priced at unit rates or a lump sum, with the main contractor adding a management and coordination margin.
Common mistake
Signing a subcontract with better payment terms than the main contract, so the main contractor pays before the owner pays him.
Frequently asked questions
Does the owner approve subcontractors?
Most contracts let the owner or consultant approve key subcontractors before the contractor appoints them.
Who pays the subcontractor?
The main contractor, unless the contract provides for direct payment by the owner in defined cases.
Related terms
- FIDIC contractsInternational standard forms of engineering contract defining rights, notices, claims and change management.
- Payment application (IPC)A periodic payment request based on approved progress and executed quantities.
- Variation order (VO)A written instruction changing scope, quantity or specification, with its price and time effect.
- Performance bondSecurity the contractor gives the owner against failure to perform.
Read next
Does your project need engineering consultancy and project management? Send the drawings or a short description and we reply within one working day.
Service detailsRequest a quote