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The Supply Chain Compliance Blog

5 things you are responsible for if you’re managing subcontractors

Posted by Gary Plant on Sep 13, 2016 8:50:40 AM

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As subcontractors aren’t full-time, or regular employees of your business, it can sometimes be a difficult task to manage their roles and responsibilities, on top of your daily job. But, it’s important that you monitor them as much as you do your own employees, if not more.

Subcontractors are viewed by the client as an extension of the primary contractor, and a failure by the subcontractor can have an adverse effect on the reputation of your company. To make sure that this doesn’t happen, here are five things that you are responsible for when managing subcontractors:

1. Choosing competent subcontractors

As a contract manager, you’re responsible for choosing the right subcontractors, should you decide to use them. And you’re responsible for determining the criteria that they must meet (this will have previously been agreed in your contract with the client).

You must ensure that the subcontractor has experience within the field of work required, and can evidence this with references and/ or project reports. You can also request that they provide you with evidence of qualifications, industry accreditations, ongoing training and health and safety training as part of your pre-qualification questionnaire (PQQ).

These details will help you to determine whether or not a contractor is competent, and should be used for your project.

2. Health and safety

While subcontractors have a duty of care to ensure that the worksite their workers are sent to doesn’t pose a risk to their health or safety, it’s not solely their responsibility.

Before each job, you must perform a health and safety assessment to identify hazards and risks that could occur due to the work that will be carried out. Once these are determined, you have to take the necessary measures to reduce, or even eliminate these risks, and provide as safe a working environment as you can.

It is also your responsibility to make sure that any necessary training, or instruction is provided to subcontractors, and that they have in writing, a copy of your risk assessment and details of your health and safety procedures too.

3. Insurance

When discussing insurance for subcontractors, there can be a lot of confusion around whose responsibility it is. There are two types of subcontractors:

Labour only subcontractors (LOSC)

These are classed as employees, and need to be included under your employers’ liability insurance.

Bona Fide subcontractors (BFSCs)

These are not classed as employees, and don’t need to be covered under the liability insurance policy of your employer. However, they do need their own liability insurance, and the level of cover must be the same as the primary contractor’s policy.

It’s your responsibility to determine which category your subcontractor falls into, and which level of insurance they should have. If you’re not suitably covered, it could be the difference between an insurance claim and the end of your business.

4. Quality control

When a client hires your company, they are going to expect you to stand behind your work, even when it has been carried out by a subcontractor. This means that it is necessary to put a quality control process in place, to make sure that work is carried out accurately and will be completed on time.

It is always advised before a project begins to discuss responsibilities and deliverables with subcontractors so that they know what is expected of them, and what they’re waiting for from you. These should always be in writing.

To keep a close eye on the quality of work carried out, set out KPIs with your subcontractors so that you can determine if the project is going in the right direction, and bring it back on track should it start to sway.

5. Compliance

Sometimes subcontractor compliance can be seen as a barrier, with managers asking to see insurance policies, license, references, background checks and more before they can start work. But, it’s the exact opposite.

Now that this level of control and compliance is required, it means that if the worst should happen, your organisation is covered, and they will already have the necessary information that they need.

Looking for more information on maintaining subcontractor compliance? You should download The contractors guide to managing subcontractor compliance, to discover tips about how to manage your subcontractors more effectively.

Download managing your subcontractors: the self-assessment guide

Photo credit: U.S. Army Corps of Engineers

Tags: Contractors

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