How would you negotiate with subcontractors to reduce costs without compromising quality?

Negotiate with subcontractors by discussing bulk purchasing discounts, optimizing project schedules for efficiency, and emphasizing long-term partnership benefits to achieve cost reductions without compromising quality.

Understanding the value of subcontractors' work is crucial for effective negotiations. First, thoroughly know the scope of work, plans, specs, and construction plan. Do your homework, do not expect the subcontractor to do it for you. Phrase questions assuming the subcontractor knows the work and has included the scope to avoid creating uncertainty, perceived risk, or give them false impressions that their quote is either too low, or too high (when it is not). Uncertainty raises costs or makes people make bad decisions. Approach the negotiation that each party should bear the risks that they can control. Too many people in negotiations are more interested in assigning risks than mitigating them with a solid plan and open communication.

When negotiating subcontracts, you need to know their scope of work as well (if not better) than the subcontractor does. It's crucial to be fair regarding risk allocation. Far too often, subcontractors are asked to take on risks they have no control over. When parties are responsible for the risks under their control, they provide better value and focus on the work, not just their risk register. To achieve the best price and quality on a project, all parties must be responsible and accountable for what they can control. Assigning uncontrollable risks shifts focus away from the work and can compromise quality. Ensure that each party manages their risks to maintain project integrity and foster a cooperative working environment.

Although my background is a geologist, I have handled several infrastructure projects such as mining roads, connecting roads, workshops & warehouses and construction of ports & jetties. So I understand enough about infrastructure. The thing I prioritize the most is safety. Safety should not be reduced or manipulated. After that I always make a priority scale in every job. Whichever is the fastest that can be done to accelerate and support productivity, that will be done first. Because the most important thing is that production can run according to the target time. Replacing materials can be one way to save costs. The use of materials available around the work environment such as wood, stone and soil is maximized as much as possible.