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 ?
Last year, the California legislature enacted Labor Code [section] 218.7 (AB 1701), which holds direct contractors (i.e., those with a direct contractual relationship with an owner) liable for unpaid wages, benefits or contributions that subcontractors owe to their workers on certain construction projects.
Under Minnesota law, public owners are allowed to withhold 5 percent of each payment known as retainage to subcontractors to ensure the project will be completed properly.
* You may fill out a Subcontractor Tracking Request form at Verify Workers' Comp Premium Status, and L&I will notify you if your subcontractor falls behind on workers' compensation requirements.
The controlling statute allows contractors to make claims on the CCB bonds of its subcontractors but does not provide for claims by contractors against materials suppliers.
The Court of First Instance appointed an engineering expert ("Expert") to review the Project's record and visit the site to determine, among other things: (i) the Project's progress, (ii) whether the Main Contractor engaged a new MEP subcontractor, (iii) the outstanding payment owed to the Subcontractor, and (iv) whether the Employer paid the equivalent payment to the Main Contractor.
* Third-party action over exclusion, which excludes coverage for liability assumed under an insured contract when a lower tier subcontractor agrees to shield upper tier contractor.
The work in question was performed by Netcracker as a subcontractor to Computer Sciences Corp.
It is unlikely that the courts will go further than this so as to allow a contractor to bring a positive claim against the employer for, say, prolongation or other losses suffered as a result of the nominated subcontractor.
But how does an owner or general contractor build a safety culture among perhaps dozens of subcontractors with diverse responsibilities and schedules--a safety culture that goes beyond mere compliance?
* Does the subcontractor use a third-party company to perform background checks or have a written policy on screening?
The payment of work done by subcontractor usually are been delayed and carried out to the next month and left the subcontractor with insufficient money to generate for the entire month.
As a result, some contractors choose to provide a CCIP where all or some subcontractors on the job are not required to have individual insurance policies for their employees, and the contractor is automatically liable for workers compensation claims filed by the subcontractor's employees.