Difference between contractor and subcontractor
In very broad terms, contractors are the organisations appointed by clients to carry out construction works. However, this apparently simple relationship is complicated by the fact that contractors tend not to have all the trades required to construct a building in their direct employment. This means that a contractor is likely to appoint a range of sub-contractors to build the works for which they have been contracted. Sub-contractors (or subcontractors) are sometimes referred to as 'subbies', or increasingly, simply as 'suppliers'.
Subcontractors are contracted by the main contractor, they are not contracted by the client.
There are three main types of sub-contractor:
- A domestic sub-contractor is a sub-contractor selected and appointed by the main contractor.
- A nominated sub-contractor is a sub-contractor selected 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.
- A named sub-contractor is a sub-contractor for a particular package selected from a list of acceptable sub-contractors provided by the client.
Increasingly, sub-contractors will themselves sub-contract elements of their package of works to other suppliers (sub-sub contractors). 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. For more information see: Suppliers.
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