The use of sub-contractors enables the main contractor to undertake more complex projects whilst not unacceptably increasing their risk, however, concerns have been expressed about the prevalence of sub-contractors because of a perception that the main contractor has less control over the skills and training of sub-contractor employees.
Increasingly, sub-contractors will themselves sub-contract elements of their package of works to other suppliers. This has resulted in the development of complex supply chains, with different tiers of suppliers, some of whom may be entirely unknown to the client.
There are three main types of sub-contract:
Domestic sub-contract This is a sub-contractor selected and appointed by the main contractor.
Nominated sub-contractor A sub-contractor selected and nominated by the client to carry out an element of the works. The client negotiates a price with the nominated sub-contractor and then instructs the main contractor to appoint them for those works.
Named sub-contractor Is a sub-contractor for a particular package selected from a list of acceptable sub-contractors provided by the client. Once the main contractor has been appointed, they then seek tenders for the various packages from the named sub-contractors. A sub-contract is then placed with the successful subcontractor.