Agreements with Subcontractors

These days it is easier to engage with subcontractors rather than hire employees for various practical reasons. One is that, in subcontracting there is less time spent with training since even before entering into such contract one already knows what he wants to accomplish and that it entails a lesser responsibility regarding the issues of employment. In subcontracting, you only pay for the specific manpower or labor that you need and that it is within a given time frame where delay may be prevented and that one only engages directly to one person or one company which is the contractor. Yet, there are as well issues that should be tackled before signing the contract so that future problems may be averted.

One thing is the issue of termination. It should be clear to both parties that they are entering into a subcontracting agreement because it is only for a given time, which is temporary, depending on the work situation. The work must be specific and the end product definite. The contractor and the subcontractor should make sure that they are on the same page, otherwise, this may bring about legal battles concerning welfare and security. Second is the term of payment. It should be remembered that in this kind of agreement, that is subcontracting, there is no employer – employee relationship. This may be the main reason why most contractors get subcontractors to work for them. The manner of payment is not determined by how they do their jobs nor exercise their profession but rather the end result of this execution. Hence, it need be noted that both parties, the contractor and subcontractor, must have the same picture regarding the positive consequences that the contractor himself wants to achieve. Third is the sense of business confidentiality. On this third issue, the qualifications of the subcontractor are necessary. There must be a sense of privacy with regard information that needs to be kept classified and away from the open in order to maintain a healthy competition in both trade and commerce. The fourth issue that needs to be clarified in the subcontracting agreement is the contractor’s policies and procedures. As a contractor, he should make sure that the people he is about to connect with as subcontractors have the ability to attain the very purpose for which they were engaged with. These people must have the ability to replicate the services or things that make the contractor’s trade exceptional so that customer satisfaction and profitability is feasible. Another is the issue of their limits. Again, it should be made clear in the agreement that they are being paid because of their contribution in the business. In subcontracting, the specified end result and the extent of their input is what is paid for, therefore, their responsibilities must be distinct, clear and specific. Finally, their attitude and personality needs to be checked. The possible subcontractors must not be too confident to act as if they are the bosses of the contractor’s trade and must not be carried away by the small successes they achieve nor too humble to admit them. The reason is that, there is a manner or mode of operation that needs to be maintained in order to gain advantage and not lose them, for such is the very core of a certain business, the customer satisfaction. In any kind of industry, it is seldom that there are positive expectations on both parties, thus, the issues pointed herein require to be tackled long before placing one’s signature on the agreement.

To end this, the relationship built by them is one that of a contractor-subcontractor relationship. They are binded by a contract wherein the first engages with the second for a specific job, business or purpose within a definite period of time. Thus, it is supposed to die a natural death and it makes the business operate faster and the job description more precise. The notes given are only to make sure that the principle for which they were acquired is attained without any other responsibilities on both parties. Remember, it pays to be candid and frank early on rather than face the dilemma later on.

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