Drafting of Subcontracts
- In order to achieve sensible and useful Subcontracts, you must first consider An operation person that understands how the work will practically be performed in a “real world” environment , and a finance person who understands the financial risk and milestones that must be weathered to keep the project profitable.
- A fair and reasonable time period for notice provision must be negotiated and agreed by the parties before signing the subcontract. However, one thing that must be very clearly and categorically followed by all is that the notice periods for various requirements, claims etc. must be should correctly understood and followed, otherwise failure and loss is certain.
- You should understand each provision of the prime and subcontract documents and confirm they make sense from an operational perspective.
- You must consider which aspects of a project are critical and understand how certain bottom line subcontract provisions will affect these critical aspects of the project. A detailed Checklist can help with this process.
- You should do page-by-page comparison of the work to be performed and the prime contract and subcontract terms, to ensure that the prime and subcontracts are consistent and allow for successful and profitable completion. Because the Main Contractor is responsible for the Owner. A subcontractor’s responsibilities should be consistent with the Main Contractor’s responsibilities are to the Owner. Thus, relying unquestioningly on old subcontract forms invites (and almost ensures) large Subcontract and Pricing Gaps.
- Experience teaches that doing things the right way takes time. And in order for any process to achieve a desired outcome. It must not only objectively and predictably lead to that outcome. But process must also be followed. It is your responsibility to confirm the process is being followed.
- Test the team with questions about the schedule, possible changes, and eliminate risky Subcontracting and Pricing Gaps that could threaten your company’s financial viability. Contracts should not be signed unless they withstand this testing process.
Founder SinoImport?? Group
1 年I need subcontractors who are looking for procurement assistance: to purchase imported goods cheaper then in the US retailers to save costs. I can help and ship any raw materials and goods from Asia. Taking all the risks on me, you only get the materials delivered to your door.
General Manager Procurement at Sobha Realty
3 年S u n i t V check this
Construction and engineering consultant at Roythornes Solicitors
4 年Completely agree. When it's not done properly the result is always disputes.
Board member
4 年Good stuff Reshma!