What are the regulations on subcontractors in construction?

subcontractors in construction. In the process of developing the market economy, people often refer to terms such as “tender,” “invitation to bid,” and “tendering activities”… If we consider bidding as a form of buying and selling goods, the buyer can be understood as the bid solicitor. The bid solicitor has the right to request many parties to participate and, on that basis, choose the right seller – Contractor according to the needs under a specific process and form. In the bidding relationship, there is not only the bid solicitor, the Main Contractor, but now there may also be the participation of subcontractors. So what are the regulations on subcontractors in construction? Let’s find out with San Antonio Contractors through the article below.

What is a subcontractor?

Subcontractors are contractors who do not directly participate in bidding or participate in bidding but will participate in the implementation of the bidding package. They will sign with the Main Contractor to participate in the project’s construction, not with the investor.

To do all the project work, the contractor must sign a contract with several subcontractors. Subcontractors will perform specialized jobs that the main contractor is not specialized in. This time the subcontractor is a third party. The sub-contractor will be responsible for signing a contract with the main contractor to supply and execute specialized works.

What are the regulations on subcontractors in construction?

Subcontractors play an essential role in the procurement relationship. Although not directly participating in the bidding, the subcontractor is a condition that helps the main contractor effectively implement the bidding package for the parts of the work that the main contractor cannot perform. So what are the regulations on subcontractors in construction?

Regulations on the use of subcontractors in bidding

In the current regulations on subcontractors, there are also provisions for exceptional subcontractors. That is the term used to refer to the subcontractors proposed by the Main Contractor in the bid or proposal. The content of these proposals favors performing particular and essential tasks in the bidding package.

Regulations on the use of subcontractors in bidding are as follows:

• The participation of subcontractors in the construction process will not change and affect the rights and obligations of the contractor.
• The subcontractor may enter into a contract with the main contractor to perform a part of the work stated in the bid.
• Regardless of whether the work is performed effectively, the contractor is still responsible to the investor for the volume, quality, schedule, and other rights and obligations for the scope of work that the subcontractor is responsible for.
• The contractor is not allowed to replace or add subcontractors outside the list of subcontractors stated in the Specific Conditions of Contract unless otherwise approved by the investor.
• Subcontractors may only be in charge of the jobs stated in the bid documents; apart from those jobs, the subcontractors may not participate in other employment.
• Must specify in the specific other requirements for subcontractors 
•  Conditions of Contract in the Bid.

Regulations on subcontracting

In other words, a subcontract is a contract signed between the Main Contractor and a sub-contractor to agree to implement the bidding package that the contractor obtained after the bidding process.

The subcontracting contract is also the basis for determining the scope of work and the work rate for the subcontractor participants. That is also the basis for determining the rights and obligations of contractors and subcontractors in the performance of the bidding package.

In addition, because the subcontracting contract is the basis for recording the agreement and establishing the relationship between the main contractor and the subcontractor, all contents in the subcontracts must meet consistent requirements. Synchronized with the main contractor contract signed with the investor.

Regulations on subcontracting contracts must ensure the following contents:

• Must sign subcontracting contracts with subcontractors having practice and operation capacity suitable to the work requirements to be built.
• Only when the investor approves the subcontractors not on the list attached to the contract can they sign subcontracts and participate in implementing the bidding package.
• In the subcontracting contract, the main contractor cannot assign all the work to the subcontractor to perform.
• The General Contractor and main Contractor must be responsible before the investor for the work performed by the subcontractor.
• The subcontractor has all the rights and obligations of the contractor.

It is essential to note that the main contractor is not allowed to assign 100% of the construction contract to the subcontractor.

The purpose is to ensure the best quality of work as well as the ability of the main contractor to be responsible before the law to the investor; of subcontractors with the main contractor during the construction of the works. It can say that the main contractor is liable for the quality of the work, the construction schedule, labor safety, the environment, etc. If you are the main contractor, you must consider carefully before deciding what percentage of the contract to assign to the subcontractor.

Above is some information about the latest regulations on subcontractors in construction. Hopefully, the article will give readers the most accurate knowledge about the construction field before deciding to work and cooperate in this field.