Subcontractor

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Subcontractor

One who takes a portion of a contract from the principal contractor or from another subcontractor.

When an individual or a company is involved in a large-scale project, a contractor is often hired to see that the work is done. The contractor, however, rarely does all the work. The work that remains is performed by subcontractors, who are under contract to the contractor, who is usually designated the general or prime contractor. Subcontractors may, in turn, hire their own subcontractors to do part of the work that they have contracted to perform.

Building construction is a common example of how the contractor-subcontractor relationship works. The general contractor takes prime responsibility for seeing that the building is constructed and signs a contract to do so. The cost of the contract is usually a fixed sum and may have been derived from a bid submitted by the contractor. Before offering the bid or before contract negotiations begin, the general contractor normally asks the subcontractors to estimate the price they will charge to do their part of the work. Thus, the general contractor will collect information from electricians, plumbers, dry wall installers, and a host of other subcontractors.

Once construction begins, the general contractor coordinates the construction schedule, making sure the subcontractors are at the building site when needed so that the project remains on schedule. The sequencing of construction and the supervision of the work that the subcontractors perform are key roles for the general contractor.

Subcontractors sign contracts with the general contractor that typically incorporate the agreement between the general contractor and the owner. A subcontractor who fails to complete work on time or whose work is not acceptable under the general contract may be required to pay damages if the project is delayed because of these problems.

A subcontractor's biggest concern is getting paid promptly for the work and materials provided to the project. The general contractor is under an obligation to pay the subcontractors any sums due them unless the contract states otherwise. Some contracts state that the subcontractors will not be paid until the general contractor is paid by the owner. If the owner refuses to pay the general contractor for work a subcontractor has performed, the subcontractor has the right to file a mechanic's lien against the property for the cost of the unpaid work.

When changes are made to the project during construction, subcontractors expect to be paid for the time and materials expended on the change. Subcontractors must receive formal approval to make the change and have a cost attached to the change before doing the work. Otherwise, when they submit a compensation request, it may be denied either because too much time has passed or because the general contractor or the owner believes the work performed was within the scope of the original project.

subcontractor

n. a person or business which has a contract (as an "independent contractor" and not an employee) with a contractor to provide some portion of the work or services on a project which the contractor has agreed to perform. In building construction, subcontractors may include such trades as plumbing, electrical, roofing, cement work and plastering. If a subcontractor is not paid for his/her work, he/she has the right to enforce a "mechanic's lien" on the real property upon which the work was done to collect. (See: contract, contractor, independent contractor, mechanic's lien)

References in periodicals archive ?
Out-tasking is assigning the work involved in discrete, specialized real estate tasks, rather than responsibility for the corporate real estate portfolio as an enterprise.
While operating, monitoring and maintaining an in-house operation represents a proven option, out-tasking managed network services offers organizations a viable alternative.
This is why organisations that rely heavily on their networks for revenue generation and business operations are out-tasking network management and maintenance.
Based on this formula, if the cost of building and maintaining internal network tools and staff exceeds $11,580, there is a distinct advantage to out-tasking.
If you're a skeptic (or maybe if you're just an experienced IT professional), you may be wondering if there is really any difference between outsourcing and out-tasking, or whether out-tasking is just some marketer's attempt to call outsourcing by a different name.
The purpose of this call for tenders is to conclude a framework contract for out-tasking services related to computing, virtualisation, storage, back-up and computer room infrastructures.
While process outsourcing and out-tasking certainly remain viable options, alternative delivery models are gaining in interest and importance.
For companies grappling with a managed services strategy, remote infrastructure services are a key first step that offers the benefits of out-tasking IT while still maintaining a measure of control," said Eric Goodness, research analyst with Gartner.
Because the software is not directly licensed by the customer and the customer obtains its benefits through a turnkey services offering, the customer may be able to fund Out-Tasking from operating budgets rather than from restricted IT capital budgets.
SolCom also produced a white paper explaining the role that out-tasking document imaging can play in the world of electronic health records.
Acxiom has been selected to deliver CA's new Out-Tasking service offering, part of CA's Mainframe 2.
Because the software is effectively leased, not purchased, Out-Tasking offerings can be funded from operating budgets rather than from restricted IT capital budgets.