Holdfast Training Services Trial Blog

We have an on-site dilemma in sub-contractor management and wondering if anyone has similar experiences or tips in the management of under-performing subcontractors.

A civils works contractor was awarded the subcontract for the installation of the stormwater pits and drains across a new inner-city road scheme as a $3.5mil AUD lump-sum contract. The tender process was completed prior to my arrival on-site but I’ve been told they were awarded the contract as the cheapest tender as well as on the approved subcontractor list as an ex-employee of one of the parent companies on the JV.

Currently, 10% of the work is complete, 3 months behind on a 12-month programme. A litany of issues including formwork blow-outs and poor workmanship leading to non-conformance reports and re-works are already 3 times the value of the whole contract retention. When I posed the question if the JV should cut its losses early and find a new subbie, the response, from middle management, was to propose a site engineer manage this subbie full-time. The engineering team is already undermanned, with an extra engineer to look after this subbie at least 3 months away.

It is often easier to progress with the status-quo because it is more straightforward to deal with the problems in front of you than try and challenge the underlying issues. Everyone on site is already busy, and taking the time to re-tender would eat into project overheads, therefore the commercial management direction is to treat the known risk with supervision instead of terminating and engaging a less risky contractor. From an outside perspective, this feels very short-sighted but shows the monthly cash flow commercial drivers of the project outweigh the quality and customer satisfaction considerations at this stage of the project.