A clear subcontract protects the GC and treats subs fairly.
In this article
Flow-down
Prime contract terms.
Payment
Terms.
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Insurance
Requirements.
Changes
Process.
Termination
Rules.
A closer look
Using a different subcontract for every sub creates confusion. A standard agreement reviewed by counsel, with scope attachments, keeps terms consistent.
Where to start
Have an attorney review your standard subcontract.
An example
A GC standardized its subcontract. Negotiations became faster and disputes fewer.
Common mistakes
Handshake deals, missing insurance and unclear change processes.
What to track
Track subcontract negotiations and disputes.
Questions to ask
Is our subcontract current? Do terms match the prime contract? Are insurance requirements clear?
Who owns it
Company leadership and legal counsel own the standard agreement. Project managers own attaching the right scope, schedule and insurance requirements for each subcontract.
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Frequently asked questions
What is a flow-down clause?
A clause that passes obligations from the prime contract down to the subcontractor, so the sub is bound to the same requirements related to its work.