Subcontractor Management in LPG Truck Loading Projects

Even though a large portion of a construction project is usually performed by subcontractors, the issues concerning about the subcontracting practice are rarely acceptable (acknowledged) and the ways to improve subcontracting practice are seldom debated.

Project delays are due to many reasons such as poor communication, lack of resources and other factors. Most of vast projects usually have problem with time and cost control. Vu Van Ngu made a case study which main objective was to find out “How main contractors manage subcontractors including procurement, cost, quality, scheduling and safety aspects?”

Conclusion

In this case, it was found out that there are many factors that influence subcontractor management such as tender preparation, subcontractor selection, and contract with subcontractor, and subcontractor scheduling management etc. In this case, the most important factor is tender document preparation. The tender document was prepared but it was insufficient and unclear because of poor design and inexperienced person was assigned to prepare tender document. Due to these reasons, the subcontractor evaluation and subcontractor selection were influenced and consequence of further sequences occurred.    

The main contractor and subcontractor have responsibility in management of project scheduling, project quality, project cost, and project safety. However, the role of subcontractor is most important. If the selected subcontractor have past experience for the project, have good management system, have enough capability to carry out the project such as equipment, tools, labor, they can complete the project by themselves. The main contractor only supports the subcontractor; it can’t replace management of subcontractor. The main contractor subcontract because of its not capable to carry out the project, or it is not specialized in the subcontracted field.

 

Recommendation

Based on the problems, it can be said that the management of subcontracting firm almost depended on the Main contractor organization such us their capabilities, their experience, their management system. If their people don’t have experience and capability, these problems normally happened:

1. They can’t properly prepare the tender document which leads to difficulty in subcontractor evaluation.

2. They can’t select the right subcontractor especially that some people base their decision on their and not base on the actual requirement written in the tender documents and biding submitted by the bidder. The subcontractor selection actually is a sensitive issue.

3. They can’t prepare sufficient contract in which all risks have been considered, possible events mentioned together with solving solution.

4. They can’t manage the subcontractor’s schedule because they don’t know how to control their schedule.

5. They can’t monitor and control the quality of the project because they don’t know exactly the quality requirements applied for the project.

6. They can’t control the cost and safety.

 

In tender document for tender:

1. The tender document is very important for bidders in preparation of document for submission. The main contractor should assign competent person to carry out this works and all tender documents should be reviewed carefully before issuance. If Main contractor do not have people who have enough experience, the main contractor should hire expert from outside.

2. When preparing the scope of work, main contractor have to check and totally understand all contents of the detailed design, any missing content or unclear content/ differences should be explained, added in tender document or request subcontractor to check and propose their solution/ methodology in submitted documents as option.

3. Evaluation form is very important for evaluation. It should be reviewed carefully by well-experienced people. It should indicate key factors based on which we can evaluate exactly in order to choose the right subcontractor.

4. In order to use for further reference, those document should be stored in systematic manner.

 

In subcontractor selection

1. Members of evaluation team should be carefully selected. They have to read and understand configuration of project and all its requirements. He/ she should know what major factors influence to project, what are minor factors which can be discussed, clarified, adjusted in negotiation step. 

2. In addition, members of the evaluation team have to understand the requirements in the legal documents such as law, decree…

3. Members of the evaluation team should have negotiation skill, should be flexible, shouldn’t be rigid during negotiation, should know how to ask subcontractor to understand capabilities and past experience of subcontractor which we intend to select.

4. Members of the evaluation team should have equitable behavior.

 

In Subcontractor contract

1. During negotiation, all responsibilities of each party should be detailed and clear.

2. The scope of work should be cleared; any ambiguous issues shall be raised and discussed until both parties understand the same meaning.

3. Payment term, milestone should be defined in details; any documents which are necessary for payment should be specified.

4. Main contractor, subcontractor should predict situations for impact cost, impact schedule and set out feasible rules for implementation.

5. Main contractor should assign a person to manage the contract ensuring that it is controlled according to commitment between parties.

 

In subcontractor scheduling management

1. The main contractor should assign personnel to control project schedule (Project schedule controller), update and report to project manager every week or when necessary. Base on report of inspector, project schedule controller should calculate achieved schedule and comparison with targeted schedule. The calculation result will serve as evidence for giving necessary solution.

2. The inspector of main contractor should go to the site regularly to inspect and record the exact quantity done by subcontractor.

3. The main contractor should carefully review the schedule of subcontractor, make sure it is feasible and includes any possible risks.

4. A solution to settle delaying schedule of subcontractor should be given in the contract. The main contractor can take over subcontractor’s responsibility to recover project schedule when the subcontractor is not able to catch schedule.

In subcontractor quality management

1. The main contractor shall assign experience inspectors to control quality of project.

2. The design document provided by client should be detailed, sufficient, indicated the criteria, and the standard applied. The design document of subcontractor should be reviewed and approved by main contractor when necessary.

3. Main contractor should check and approve construction procedures, especially inspection and test plan (ITP) content in the procedures.

4. Main contractor should require subcontractor set up quality team and control quality by themselves.

 

In subcontractor cost management

1. The payment should be based on completed quantity; this quantity should be strictly controlled.

2. Any impact cost should be checked, approved, and controlled strictly.

 

In subcontractor safety management

1. The safety should be emphasized at the start of the project and maintain through the project.

2. The safety should be reminded regularly.

3. The risk assessment is always useful.

4. The permit to work should be applied for hazardous work.

Abstract

Because of the increased project complexity and the highly competitive nature of the construction industry, a construction project often is executed by several subcontractors. Hence, effectively managing the numerous subcontractors involved in a construction project becomes a crucial challenge for the general contractor in ensuring timely project completion with acceptable quality.

Managing subcontractors does not simply involve asking them to allocate resources (labor, material, and machinery/equipment) into the jobsite whenever an activity is scheduled, and then pushing them to speed up the work without a clear consciousness of schedule risk. Factors (or uncertainties) such as weather, labor, site conditions, material delivery, and equipment breakdown can influence the time performance of subcontractors, affecting total project duration.

But almost General Contractor is leak of management sub-contractor and it caused many difficulties and conflicts during performance, management of projects.

The most difficulty of sub-contractor management is deviation scope of work between sub-contractors, controlling schedule and interfacing between subcontractors.

In managing project subcontractors, a general contractor must determine the items of work to be subcontracted, select subcontractors, set subcontract agreements, and control the subcontractors during construction.