Subcontractor Management in LPG Truck Loading Projects

Subcontracting in the construction is a fast-growing industry in recent years. Technology, scale and size of construction project become more specific and complex. Therefore, main contractors often sign the work to subcontractor because of deficient resource or expertise in the specific area.

Normally main contractor only perform works in which they are strong while the other works are being subcontracted. Subcontractor management is importance factor for success of project. 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 because of many reasons such as: poor communication, lack of resources and other factors. Most of vast projects usually have problem with time and cost control.

Mr. Vu Van Ngu made a case study to know how main contractors manage subcontractors including procurement, cost, quality, scheduling and safety aspects.

Conclusion

In this case, there are many factors influence subcontractor management such as tender preparation, subcontractor selection, contract with subcontractor, subcontractor scheduling management etc. The most importance factor in this case is tender document preparation. The tender document had been prepared but it was insufficient and unclear. The causes of this are poor design document and assignment of inexperience person to prepare tender document. Due to insufficient and unclear tender document, 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 subcontractors have past experience for the project, have good management system, have enough capability to carry out the project such as equipment, tools, labor, and then they can complete the project by themselves. Main contractor only supports subcontractor, it can’t replace management of subcontractor. The main contractor usually subcontracts because of its incapability to carry out the whole project.

Recommendation

Based on the problems mentioned, it can be concluded that the management of subcontractor almost depends on the Main contractor organization such us their capabilities, their experience and their management system. For example if their people don’t have experience and capability, the problems below normally happen:

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

2. They can’t select right subcontractor but they based on their feelings and not base on the actual requirement wrote down in the tender documents and biding submission of the bidder. The subcontractor selection actually is a sensitive issue.

3. They can’t prepare sufficient contract in which all risks have to be 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 it.

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 of subcontractor.

In tender document for tendering:

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

2. When preparing the scope of work, main contractor have to check and understand thoroughly all the contents of 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. The evaluation form is very important. It should be reviewed carefully by a well-experienced people. It should indicate key factors base on which they can evaluate and chose the right subcontractor.

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

In subcontractor selection:

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

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

3. Member of 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 they0 intend to select.

4. Member of evaluation team should have equitable behavior.

In Subcontractor contract:

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

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

3. Payment term, milestone should be defined in detailed. Any documents which are necessary for payment should be specified.

4. Main contractor and 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 contract ensuring the contract 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 be evidence for giving necessary solution.

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

3. The main contractor should review carefully the schedule of subcontractor to 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 responsibility to recover project schedule when 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, indicate criteria and 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, specially 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 controlled strictly.

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

In subcontractor safety management:

1. The safety should by emphasized at the start of the project and maintain throughout 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.

His thesis abstract is copied and posted.

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.