It is without doubt that the relationship between contractors and subcontractors is the construction industry’s bread and butter. Maintaining healthy relations between all the parties involved in a project is completely essential to delivering a project on time and to specification.
However, in some cases difficulties between contractors and subcontractors can arise, particularly in terms of price estimation and job costing. With this in mind, how can construction management software solutions prevent these issues from occurring?
Why relationships matter
There are many mutual benefits when it comes to sustaining a positive working relationship between contractors and subcontractors. An equal, transparent relationship between these two parties ensures projects are completed efficiently and safely; for the benefit of not only the building’s occupants but the companies’ reputations.
In comparison, negative relationships between contractors and subcontractors can have adverse effects on a build, potentially jeopardising productivity, quality, completion times and securing future work.
On a large commercial project a single contractor can be working with up to 20 subcontractors, possibly more. For the contractor, there is a huge amount of responsibility on their shoulders to manage their subcontractors efficiently. On the other hand, for the subcontractor, there is always a pressure to deliver what is required of them. A positive working relationship between the two operates in exactly the same way most healthy, mutual bonds work – through clarity, communication and respect.
Creating the best working relationship
To build and maintain honest relationships throughout a project’s lifecycle, it is crucial to put these three factors into practice at each stage, particularly when it comes to dealing with more sensitive tasks that are likely to cause temporary confusion and disagreement.
For example, let’s consider a delicate subject such as a project’s initial job costing stage. A common procedure across the construction industry and indeed further afield, job costing is a crucial process which creates an image of the labour and materials required and how profit can be made. The usual process is: one party, a subcontractor, estimates the cost of labour and materials and delivers this quote to the other party, the contractor.
Although this description sounds relatively straightforward and unambiguous, this process can be more complicated when put into practice. In some cases, a contractor might be sceptical that the cost of materials or labour is a little higher or lower than originally anticipated. But, as this would typically be a manual process in which a subcontractor would present physical documentation to a contractor, there is little means for the contractor to accurately benchmark the costing to any other source.
The lack of consistency and standardisation is an issue here and rarely bodes well for the remainder of a project. Immediately, this kind of situation creates a precarious bond between contractor and subcontractor. Although the contractor might go ahead with the job, there will always be that seed of doubt at the back of their minds which questions the reliability and accuracy of the job costing. “Is that piece of machinery really needed?”, “Could I have got it at a different price?”
Consistency is crucial
Clearly, there needs to be a standard process in which price estimations can be traced and compared to a faithful source.
An example would be a modern construction estimating solution such as Eque2’s Evaluate, which incorporates industry-recognised and centuries-old Laxton’s pricing book. Built into Eque2’s EValuate, Laxton’s Priced Libraries features authentic, standardised rates for contractor’s to benchmark subcontractors’ tenders. Compatible with both SMM and NRM rules of measurement, Laxton’s provides annually updated rates for accurate up-to-date information.
EValuate with Laxton’s Priced Libraries is fully compliant with industry standards, giving contractors and subcontractors complete peace of mind when it comes to labour and material cost estimation. And, what’s more, as Laxton’s is now fully integrated within modern estimating software, it means all estimations can be traced, recorded and accessed easily in the same place.
But what does this mean for contractor and subcontractor relationships? With modern estimating software, subcontractors and contractors feel more comfortable during the estimation process. This is because Laxton’s can be used as a benchmarking tool for contractors to compare rates with an accurate, reliable source, and can work with the subcontractors collaboratively from there. Overall, it creates a mutually healthy and beneficial business relationship for all.
There is no doubt that the contractor and subcontractor relationship is essential to a project’s success. With this in mind, isn’t it high time that more robust, digital measures were employed to preserve this important bond?