Definition - What does Subcontractor Management mean?
Subcontractor management is a process that involves overseeing the lifecycle of one or more subcontracts for an employer.
The subcontract management process involves:
- Identifying the employer’s specific needs for a project
- Identifying and qualifying potential contractors
- Communicating employer policies to hired subcontractors
- Providing ongoing oversight of contracts
Subcontractor managers are responsible for enforcing the safety and cost provisions of a given contract and for determining if any request to deviate from those provisions by a subcontractor can be reasonably justified.
It is also called subcontractor administration.
Safeopedia explains Subcontractor Management
Subcontractor management ensures consistency in how a firm manages its subcontractors, which in turn mitigates the risk to the employer.
Consistency is achieved by defining, to the greatest extent reasonably practicable, a uniform framework of expectation for both all subcontracted and all project management personnel.
Creating a managed, uniform framework for communication between the employer and subcontractor prevents projects with numerous subcontractors from becoming fragmented or inflexible. By eliminating these challenges, the communication framework reduces the likelihood that subcontractors will engage in non-compliant behavior.
Four Phases of Subcontractor Management
The subcontractor management process can be roughly divided into four distinct phases:
- The pre-award phase centers primarily upon identifying the needs of a project and locating individuals capable of delivering those needs
- The award phase involves qualifying and procuring the actual contract, along with establishing basic criteria for project work, such as safety standards
- The post-award phase centers around monitoring compliance by subcontractors and maintaining ongoing communication
- The close-out phase focuses on validating that all agreed-upon responsibilities have been adequately delivered by the hired subcontractor.
Subcontractor managers (SCMs) oversee the procurement of the material, equipment, and service contracts by the employer for the purpose of successfully completing a project that the employer has either initiated itself or has been contracted to perform.
SCMs commonly hold professional certificates in related fields, such as the Institute for Supply Management’s Certified Professional in Supply Management (CPSM) designation and the Certified Professional Contracts Manager (CPCM) designation from the National Contracts Management Association.