Both the general contractors and subcontractors play integral roles in the construction industry. Very often, companies in the construction industry rely on hiring subcontractors to complete specialty tasks or reduce costs for a construction project. As a general contractor, you can have a lot of reasons for wanting to hire both the general contractor and a new subcontractor. If you’re just starting off, or your subcontractor has gone out of business, or you haven’t found the right fit for you, it can be challenging to locate a reliable sub. In most cases, once GCs find the perfect match, they stick with that subcontractor for years. Below you can read about how to effectively find and hire subcontractors and independent contractors, as well as how to pay them.
Expert subcontractors usually belong to an organization. Search for an organization near your location to get access to a top-notch pool of professional subs. Your chances of finding one that perfectly fits your needs are high. Additionally, you can be sure that they have the required license, and you can get feedback on the actual work they have done.
If there is no such organization near you, or you didn’t find a good match, your next best option is to ask around. Ask other GCs and PMs for recommendations of subs they’ve worked with. This way, you’ll also get feedback on the reliability of the subcontractor. If you’ve seen some good subcontractor’s work, you can ask around and find out who did it. Lastly, you may have worked with a good subcontractor yourself, so search in your memory as well.
Also, you can put out a job application online, put up fliers, and hold interviews to find a subcontractor that fits your needs. Keep in mind that this can be a long-term commitment, thus, you would rather get it right the first time and grow with them. Make sure that they have the experience, a good safety record, and the required licenses. Keep in mind that you also need to be able to communicate with the person, so their personality also matters.
Most construction companies rely on subcontractors to handle specialized tasks and keep their projects on track. These skilled professionals play a crucial role in the construction industry, contributing their expertise to various phases of a project.
Once you find your right fit, the subcontractor hiring process includes several steps that you should follow to guarantee the possibility of a long-term collaboration. You can find these steps below.
Depending on how you found your subcontractor, some of these steps may not be necessary. To completely make sure that a future collaboration is possible, you have to check their previous work, ask for references and testimonials, and lastly, make sure they’re available when you need them.
Before you commit to a subcontractor, you have to understand how they work. Have a trial period for the subcontractor you’re thinking of hiring, after which you can be sure whether you want to work with them for sure. Go and look at previous work they’ve done to figure out whether they’re up to your standards.
Once you’ve finally found the one subcontractor you want to stick with, you need to protect yourself and your business by getting a subcontractor agreement. In the agreement, you clearly state that the subcontractor is not your employee, and you’re not obliged to pay their benefits or taxes. Other than that, the written agreement should include the scope of work, payment terms, and deadlines.
Subcontractor Agreements play a crucial role in establishing the terms and expectations for collaboration on various construction projects.
Last but not least, you have to know how to compensate your sub for the work they’ve done. The financial and technical aspects cannot be overlooked. There are a couple of steps to effectively working with subs, which you can find below.
Whoever you work with, you have to think about your safety and protect your business. Ask your sub to send you proof of their insurance and bonds for your records.
To completely make sure that the subcontractor you’re dealing with has a legitimate business and will not scam you, check their financial statements. This will also help you guarantee that you can keep working with them in the future.
As a requirement of the IRS, you’ll need your sub to fill out a W-9. It’ll provide you with your subcontractor’s Taxpayer Identification Number. Another form you may need to fill out is a Form 1099-MISC to report the work that cost more than $600 for the year.
Overall, long-term commitments require a lot of preparation, due diligence, and monitoring. Hiring a subcontractor is a vital step for any PM or GC. Follow the points mentioned above, and you’ll find the one that won’t cause you any trouble in the future. Remember to not only look at their work but also their character, since if communication is flawed, good work will not make up for it.
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