Is It Possible to Hire a Subcontractor If You Are a Construction Sub as Well?

The most common scenario in the construction sector is when the general contractor hires individual specialists in a single niche to cover some labor resource gaps and meet the project deadlines. This way the GC starts to cooperate with the subcontractor. This is the typical scheme of the contractor-subcontractor cooperation algorithm.

Nevertheless, many representatives of the construction market are interested in one more scenario of cooperation. For example, a possible model for building companies is a subcontractor + subcontractor. One sub can unite with another individual expert of another direction and work together with a single contractor. This way the GC will track the performance of hired specialists with the help of special-purpose digital tools. Cost estimating software is applicable for subcontractors of any type (plumbers, electricians, insulation installers, etc.).

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But is it possible to neglect the hierarchy and focus on the cooperation model when the subcontractor hires other subs? But there is a range of peculiarities to take into consideration in case you are interested in this variant.

How Can Subcontractors Hire Other Subs?

First of all, you should understand that all the legal backgrounds should be met. Many customers pay attention not to your professionalism and portfolio first. They are focused on your documentation, insurance, and the accuracy of all the reports. If you are a trusted subcontractor for many clients, be ready to draw up new agreements with the subs you hire.

It means that you turn from the individual specialist in your niche into a contractor who attracts the same experts. Not to ruin the hierarchy, it is necessary to pay attention to contracts. Ask your attorney to prepare all the agreements that will protect your new relationships.

Among the key peculiarities to take into account are:

• Determine the scope of work you would like to entrust to your new workers.
• Payment terms should be also transparent and clear for both parties.
• Be sure that all the permits and licenses are ready before starting to share responsibilities.
• Discuss what are the main reasons for the contract breach.

It is worth noting that most aspects are similar to the model contractor-subcontractor. Nevertheless, if you want to hire your own subs, be ready to play the leading role as the GC. Your hired expert will be responsible for this or that scope of work. You cannot cover other spheres and niches with a single subcontractor. In case you have a multi-purpose specialist, it is better to attract this person to your staff and run your own business like a separate-standing company. 

Subcontractors VS Referrals for Future Work

Some subcontractors still prefer to share some scope of work without any responsibilities and guarantees. But the best way to cooperate legally and risk-free is to find referrals for your future performance in the market. For example, you had a successful contract with the man who painted walls and trimmed the interior rooms of your client. You save your time and satisfy the customer at once.

At the same time, your subcontractor hired got everything promised according to your agreement. The sub you have a fruitful cooperation with will advise you as the contractor (not as a subcontractor you perform in the local market). This way he or she will become the referral for your future work.

Hiring Subcontractors for Scaling Up Your Business

Remember that you can count on faster scaling-up activities in the context of your construction business with the help of hiring subcontractors. It can be seen that respectful subs can sign contracts with other individual specialists and act as trusted general contractors for other willing narrow-direction specialists.

It means that you can scale up your business while hiring subcontractors. They become referrals for your work and recommend cooperating with you to other individuals in the niche. If you are searching not only subs for one-to-one tasks but for reliable team members, try this model. Nevertheless, you need a professional attorney from the very beginning not to miss any details in the contract.

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