Vetting and managing subcontractors avoiding the bear traps
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Vetting and managing subcontractors – avoiding the bear traps. Wayne Hughes HQN. Role of subcontractors in a modern maintenance service – a client’s perspective. Support the main contractor in the delivery of agreed service objectives: Time Cost Quality Customer satisfaction

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Role of subcontractors in a modern maintenance service a client s perspective
Role of subcontractors in a modern maintenance service – a client’s perspective

Support the main contractor in the delivery of agreed service objectives:

Time

Cost

Quality

Customer satisfaction

Enhance the operational capacity and competency of the main contractor

Provide specialist services

Provide Value for Money through the supply chain

And……..


To protect and project the image of the client organisation
to protect and project the image of the client organisation……………..


Role of subcontractors in a modern maintenance service a contractors perspective
Role of subcontractors in a modern maintenance service – a contractors perspective

Support operational delivery of agreed service objectives

Enhance operational capacity and competency

Provide specialist services

Reduce exposure to specific risks

Provide Value for Money through the supply chain

Enable easy and rapid downsizing in deteriorating market

Increase margins and profitability


Current trends and characteristics 1
Current trends and characteristics (1) contractors perspective

Strategic use of subcontractors becoming the norm for larger maintenance contractors

No longer limited to specialist trades

Growing number of contractors using subcontracting as the principle means of delivery (is this management contracting dressed up as partnering)?

Relationships between contractors and subcontractors predominantly informal

Subcontractor selection remains unsophisticated


Current trends and characteristics 2
Current trends and characteristics (2) contractors perspective

Little evidence of subcontractors being part of integrated supply chain

Cost still the main criteria for selection in many cases

Little evidence of subcontractors being aware of clients requirements or service philosophies (DLO subcontractors an exception)

Payment terms enjoyed by contractors not passed onto subcontractors

Operational management of subcontractors patchy

Performance management of subcontractors across the sector a real problem

Use of nominated subcontractors (other than via a DLO)

rare


Slip ups a few examples
‘Slip ups’ – a few examples contractors perspective

Subcontractors being used to make good inefficiencies of directly employed staff – client paid for this through open book arrangement

Subcontractor used that had been removed from client’s approved list for fraudulent activity

Subcontractors employed without assessment or approval prior to commencing work

Failure to obtain CRB clearances

Failure to provide job completion information in a timely manner

Quality of work poor and unchecked


Characteristics of effective subcontract arrangements
Characteristics of effective subcontract arrangements contractors perspective

Clients play active role in selection and performance monitoring

There is transparency and clarity of which subcontractors are being used where and for what purpose

Formal agreements exist between main and sub contracts

Subcontractors have high degree of awareness of contractor’s methods of working and client’s service expectations

Key subcontractors attend client/contractor progress meetings

Subcontractors are encouraged and rewarded for innovation

Key subcontractors have access to and use contractors business support systems, eg, handhelds, etc

Formal systems exist for:

Selection

Quality assurance

Dealing with underperformance

Checking currency of insurances and qualifications


Vetting subcontractors 1
Vetting subcontractors (1) contractors perspective

Degree of influence dictated by

Type of relationship (DLO or contractor)

Nature of relationship

Attitude of client

Contractual framework

Degree of control being sought


Vetting subcontractors 2
Vetting subcontractors (2) contractors perspective

Start at the procurement stage if possible

Questions to ask the main contractor

What proportion of the proposed works will be subcontracted?

What are your assessment and approval arrangements?

How is general competency assessed?

How do written contracts or agreements with subcontractors detail expected performance and monitoring arrangements?

Who are the named managers who lead on monitoring and review arrangements with subcontractors?


Vetting subcontractors 3
Vetting subcontractors (3) contractors perspective

Questions to ask the main contractor

How are your quality systems applied to your subcontractors?

How do your subcontractors keep you informed of progress against all jobs in their possession?

How do you keep your subcontractors informed of client requirements?

How do you measure the effectiveness of your subcontractors?

How do you ensure that subcontractor related problems are resolved swiftly?

How do you check external reports of subcontractors (Corgi inspections, etc)?

How do you seek continuous improvement?

How do you deal with under-performance?

How will you ensure that your subcontractors protect and project our image?


Basic information you need to evaluate suitability of subcontractors
Basic information you need to evaluate suitability of subcontractors

Company details

History and capability

Relevant experience

Financial standing (if working through a DLO)

Management, staff, operatives and training

CRB clearances if required

Quality and environmental accreditation

Approach to risk management, value management, continuous improvement and customer satisfaction

Details of any health and safety breaches over past five years

References (including details of all current and recently dissolved client relationships?)


Managing subcontractors 1
Managing subcontractors (1) subcontractors

Principally the role of the main contractor but there are things you can do:

Test that subcontractors are aware of your requirements

Quality

Timeliness

Customer care

Complaint handling

Continuous improvement


Managing subcontractors 2
Managing subcontractors (2) subcontractors

Agree with the main contractor a subcontractor approval process – no surprises

Agree how subcontractor performance will be measured and how you will receive this on a scheduled basis

Agree ‘trigger points’ for corrective action

Insist that you receive copies of minutes of subcontractor progress meetings

Insist that you receive copies of post inspection reports

Insist that key subcontractors attend your contract progress meetings

Ensure that subcontractor performance is a standing agenda item

Encourage shared learning and reward innovation

Deal with problems swiftly – via the main contractor


Over to you
Over to you! subcontractors

From a subcontractor management perspective, and drawing

from your own experience

What has worked well?

What hasn’t worked well?

How do you measure success in this area?


Thank you! subcontractors


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