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Manage Subcontractors and Mitigate Risk with Construction-Specific Software
It’s critical for general contractors to select subcontractors that provide high-quality work on schedule and within budget. Finding the right team of professionals at the right price can greatly impact general contractors’ productivity, reputation and profit.
It can be challenging to obtain competitive bids from top subcontractors and choose the one that’s a balance of the best skills at the right price with a track record of excellent work and reliability. If subcontractors miss critical deadlines, can’t finish the job or finish it poorly, the general contractor will face a series of complications, such as not getting paid on time and a reputation for doing shoddy work.
It is essential for construction superintendents and project managers to be informed about everything each subcontractor is doing, should be doing and how they’re doing it, as well as the impacts on other aspects of the project. Staying aware helps project managers minimize risk and ensure the best possible outcome for the owner and the company.
A complete construction management software solution can help general contractors manage subcontractors throughout the entire project life cycle. All applications for estimating, accounting and project management work together seamlessly in a single solution for optimal productivity, accuracy and profitability.
Managing the Bid Process
When detailed bid information comes in from subcontractors, it is often like comparing apples and oranges. General contractors and subcontractors use varying methods to quantify jobs, which can make it challenging to evaluate bids. For example, if the general contractor is quantifying a job manually and the subcontractor uses an automated system, or vice versa, the numbers can be very disjointed.
On bid day, the office can be extremely hectic with the exchange of quotes and questions and numerous subcontractors working up until the last minute. One misstep could lose the bid, or worse, win the bid with the wrong numbers, which can be an expensive mistake.
Using a complete construction management software solution, a general contractor has a single place to create the original estimate, report bid day instances, generate invitations to bid requests and produce the final proposal. Having pertinent estimate-related information necessary to produce the final number in one location streamlines communications, ensures accuracy and instills accountability. A documentation trail minimizes discrepancies and questions that may arise during project execution.
Managing Subcontractor Documentation
Throughout a project, an important responsibility of the general contractor is ensuring all subcontractors have the proper insurance coverage and safety measures in place. With manual methods or most software programs on the market today, it is a challenge to track the multiple insurance and compliance issues related to each subcontractor, apply multiple cost codes per project, and track the liens. By simplifying the process of creating and tracking subcontract documents (e.g., commitment of pricing, scope of work, terms and conditions), general contractors can streamline workflow and more easily ensure subcontractors have liability, workers’ compensation and correct bonding in force.
Managing Subcontractors on the Job
Many things can go awry during a project—subcontractors that miss deadlines, cannot perform their tasks or perform poorly—demanding that general contractors react quickly and knowledgeably. To accomplish that, as well as prevent mistakes, general contractors can rely on construction management software to ensure all project data and documentation is correct and managed in a single location.
With an end-to-end solution, the project manager can easily know which subcontractors are assigned to which work, understand what the committed cost is on a phase of work and efficiently track the original contract versus the revised scope of work for each contractor. In addition, creation of the subcontracts and change order documents may be completed by one of many different constituents in a contract, such as finance, project management or purchasing.
The benefits of a complete solution, utilized by everyone on the team, are broad reaching. The controller can efficiently monitor the vendor billings against subcontracts, as well as the subcontractor retention being withheld, and is able to ensure invoices are applied to correct cost codes. Furthermore, the controller can make sure a contractor does not overbill and that subcontractors are not paid if insurance, licensing or bonding information is not up to date.
A complete software solution allows general contractors to fully automate their subcontract control process. By streamlining data entry and having a single location to track all relevant information associated with each subcontract, general contractors will minimize risk and have peace of mind that their projects will be completed on time, on budget and with the high quality their owners expect.
About the Author: Mike Gillum is director of product management at Maxwell Systems. For more information, call (800) 688-8226, email mgillum@maxwellsystems.com or visit www.maxwellsystems.com.
Learn how a complete construction software solution fits the needs of general construction for project management and subcontract management. Please contact Maxwell Systems at 800-688-8226.
