How GCs Manage Challenges with Subcontractors

Danielle Ternes/Construction Dive

Nearly every prime contractor has a story about a nightmare sub. Whether it’s shoddy work or simply failing to show up to the jobsite, suboptimal partners in today’s labor and skills market are an increasingly common reality. 

Trent Cotney
Courtesy of Adams and Reese LLP

Trent Cotney, a partner and head of the construction practice at Tampa, Florida-based Adams and Reese, said since the COVID-19 pandemic, there has been exponential growth in the use of subcontractors on jobsites.

“A ‘problem subcontractor’ would be any person or entity who consistently causes issues that would negatively impact a construction project,” he said. “Common problems include work delays, miscommunication or non-communication, lack of proper equipment or expertise or manpower, a failure to comply with safety regulations, or payment issues and delays — all of which affect project continuity.”

To safeguard their interests and ensure project success, attorneys say contractors must understand effective strategies and contractual protections to deal with problem subs.  

“If a prime is smart, they will do their homework in advance,” Cotney said. “Know what you’re getting into and don’t do work with subs that aren’t reliable or get into trouble. It’s worth paying more to have a professional subcontractor work with you.”

Dealing with problem subs

Jeffrey Paul Lutz, a construction attorney in the Atlanta office of CM Law, noted the first line of defense for avoiding problem subs is to conduct a thorough investigation into their past work history and to make thoughtful decisions during the hiring process.

Jeffrey Paul Lutz
Courtesy of CM Law

“The lowest bidder means little if hiring them will cost you more in the long run through the change order process, corrective work, dispute resolution and/or the engagement of counsel,” he said. “I advise all of my contractor clients to conduct detailed background checks, review past performance and verify references to ensure the subcontractor has a solid track record.”

The second line of defense would be to draft a clear and comprehensive subcontract that outlines the scope of work, deadlines, quality standards and penalties for non-compliance.

“A well-crafted subcontract defines expectations clearly to ensure accountability, quality and timely delivery,” Lutz said.

During the project, it is important to implement a system for ongoing oversight and quality control to ensure work meets the required standards, and address issues promptly to prevent them from escalating.

“This can be accomplished through effective communication and maintaining open and transparent communication with subcontractors to foster collaboration and quickly resolve any issues,” Lutz said. “While onsite, regular communication is critical, it is equally important to document your written directives in writing.”