A business is only as strong as its subcontractors. In his latest business article in Huffington Post, “Sub or Scrub, Why to Keep a Close Eye on Subcontractors”, attorney and author Jack Garson shares tips for contractors on how to get to know a sub, and what to include in the subcontract for maximum protection.
For many contractors, profit or loss, or a project’s success or failure, relies heavily on the quality, timeliness and budget consciousness of the work performed by subcontractors. Many general contractors do not recognize that their survival is directly tied to the performance of subs. Contractors cannot afford not to stay on top of the affairs of subcontractors, according to Garson.
He outlines some steps for businesses considering subcontracting work:
Know your sub. Ensure that a sub is qualified to perform the required task that he is hired for, and that he is solvent and able to cover his debts.
Add protection. A few simple, well-written clauses in a subcontract could be the difference between a successful or disastrous project. Require the sub to have insurance, bonds and lien waivers to protect the contractor from liability for the sub’s work.
Tricks and traps. State law may prohibit certain practices and limit the power of a general contractor. However, there are allowances. A well-written clause in a subcontract is a tremendous benefit.
Garson admits that managing subcontractors requires a lot of work, but when your business is on the line, iron-clad contracts, knowledge of the law and discipline are crucial.