A guide to monitoring subcontractor performance and avoiding problems that can easily crop up.

The construction industry is growing again, after some hard retrenchment. But the recovery’s led to a huge skills shortage that most firms can only solve with subcontracting.

That makes subcontractor performance management more important than ever. After all, when subcontractors work for your business, they become your business. Evaluating their work on the right criteria, and the checks and balances that keep them on track, are key to any successful project.
Most contractual disputes come down to a lack of clarity. Let’s look at some areas where technology can help.

STARTING ON THE RIGHT FOOT: SETTING REQUIREMENTS

A contract isn’t just a legal safeguard. It sets out your expectations for the project. Compliance with regulations and building codes are hygiene factors, not the main show. So the first job is to get buy-in from everyone involved.

Yes, it absolutely needs to specify hard legal conditions, like what happens if overruns occur. But good requirements are the plan, not the penalty. Because if your requirements are clearly communicated, the contract’s doing its job.

So take a look at your current requirements, and see if they’re a picture of veiled threats, or a vision of what success looks like.

The right approach here pays back tenfold.

PUTTING PEOPLE FIRST: MAKING SURE OF YOUR SUBCONTRACTORS

The first task of subcontractor performance management is making sure you’re monitoring the right metrics. The performance criteria for a sixteenth-century listed building are very different to a new-build office. The right subcontractors for the job may be different, too.

When you have an insider’s knowledge of the local subcontractor market, It’s all too tempting to play it by ear. Which makes it all the more important to adopt a consistent process instead. Always match the subcontractor to the job, not the job to the subcontractor. The right processes, and the right software, can help.

MAKE QUALIFICATION CHECKS A NATURAL PART OF THE PROCESS

There’s a simple way to avoid fouls and fines from inspectors: carry out checks on everybody and maintain those records over time.

Just because somebody had a Safety Card a year back doesn’t mean it’s valid today. (More than 6,000 subcontractors are having to recertify.) Yet simple regular checks by timed email or text message – something today’s software can help with and can keep your database up to date without an onerous maintenance burden. Automate, automate.

CHECKS AND BALANCES: THINK PROCESSES, NOT EVENTS

A successful outcome depends on attention to detail at many stages throughout the process. So the next aspect of monitoring subcontractor performance is feedback. What daily checks can give you the best information and flag up any problems in advance?

Many subcontractors are happy to provide information. So make it easy for them to comply. Paper questionnaires and signatures may not be needed; some project management applications work with SMS messages, and email and web forms can work well for mobile-using builders.

Small daily checks are a better choice than stretch goals, because they let you keep tabs on the process as it happens. And today’s software makes them easy to manage, even with 200 subcontractors on site.

PUT CLEAR COMMUNICATION PROTOCOLS IN PLACE

Of course, monitoring subcontractor performance thrives on information, so make sure your project plan has clear rules for communicating progress back to the project manager. Knowing about late deliveries, resource shortages, timeline crushes and the myriad other issues that affect construction in advance makes for a smoother project.

Subcontractors are great talkers; give them a communication channel, and they’ll use it. And don’t limit it to the foreman’s role. Sometimes, the best information comes from the coalface.

ADOPT PAYMENT SCHEDULES THAT MAKE SUBCONTRACTORS SMILE

Lastly, the aspect of subcontractor performance management that means most to the average construction worker: tell your people when you’ll pay and under what conditions.

Disputes are rising, and many are due to simple miscommunication. Simple and clear payment protocols show your subcontractors where you stand,, and if followed consistently, turn them into loyal friends.
So make monitoring subcontractor performance part of your process!

TAKEWAYS:

  • Monitoring subcontractor performance includes taking account of the human factors
  • Monitoring subcontractor performance removes many contractual dispute risks before they come up
  • Subcontractor performance management helps apply consistency and fairness to resolving disputes

Resolving disputes is good. Avoiding them is better. Download: 7 Inherent Risks of Construction Projects and How to Manage Them

7 Inherent Risks of Construction Projects and How to Manage Them