What Is Sub Contracting?
Many civil engineering contractors now
use sub-contractors to do much of their work. Most conditions of
contract permit a contractor to sub-let work of a specialist nature;
but the ICE conditions of contract have gone further and permit the
contractor to sub-contract any part of the work (but not the whole of
the work), subject only to notifying the engineer of the work
sub-contracted and the name of the sub-contractor appointed to
undertake it.
The contractor does not have to notify
any labour-only sub-contracts he uses. The engineer can object, with
reasons, to the appointment of a sub-contractor, but otherwise has no
rights in connection with such sub-contracts, except that he can
require removal of a sub-contractor who proves incompetent or
negligent, or does not conform to safety requirements.
Under FIDIC conditions for overseas
work, sub-contracting requires the engineer’s prior sanction. In
building work there has long been a trend to pass the majority of
work to sub-contractors who specialize in various trades, and the
same has now occurred in civil engineering where many operations are
‘packaged up’ and sub-let.
Thus sub-contracts may be let for
excavation, formwork, reinforcement supplied and erected, and
concreting. The advantage to the contractor is that this reduces the
staff he needs on site and his capital outlay on plant and equipment.
He can use sub-contractors with proven experience and does not have
to take on a range of temporary labour whose quality may be variable.
The contractor retains responsibility
for the quality and correctness of work and, of course, has to plan
and co-ordinate the sub-contract inputs, and often supply any
necessary materials.
But if much of the work is
sub-contracted, the contractor’s or agent’s main input to a
project may be that of dealing with the sub-contracts and controlling
their financial outcome, so these matters may take priority over
dealing with any engineering problems which arise.
The contractor may therefore tend to
leave a sub-contractor to solve any problems he encounters, on the
basis that these are his risks under his sub-contract and it is up to
him to deal with them. But the sub-contractor may think otherwise, so
a dispute arises as each considers the other responsible for any
extra cost or delays caused.
Frequent disputes have also arisen in
recent years when any default or presumed default by a sub contractor
has resulted in the contractor withholding payment to him. Late
payment by contractors to sub-contractors is another widespread
source of complaint by sub-contractors, but remedies are difficult to
devise.
The sub-contracts are private contracts
whose terms are unknown to the engineer and the employer, so they
cannot interfere in any such dispute. The engineer has only power to
protect nominated sub contractors, i.e. subcontractors he directs the
contractor to use.
