Last edited 13 May 2017

Contractor vs supplier

In very broad terms, 'contractors' are organisations appointed by clients to complete construction works. However, this apparently straight-forward definition is complicated by the fact that contractors tend not to have all the trades or goods required to construct a building themselves. This means that they are likely to appoint a range of subcontractors and suppliers to help build the works for which they have been contracted.

Traditionally, ‘suppliers’ were considered to be organisations contracted to provide physical supplies such as goods, materials, plant and so on, either directly to the client or to the contractor or subcontractors.

However, this definition has become blurred by the increasing complexity of the construction supply chain and the emergence of practices such as off-site fabrication in which the provision of complex fabricated goods might include activities that would otherwise be classified as construction work, and the increasing outsourcing of operational contracts for the supply of services (rather than goods) to run completed developments.

A more simple distinction therefore might be that a contractor is contracted to complete construction works whilst a supplier is contracted to supply particular goods or services.

However, the distinction has been further complicated by the UK government using the term ‘supplier’ to refer to any ‘…provider of services or goods either directly to the employer or to another supplier in a supply chain’ and suggesting that ‘...a tier 1 supplier can provide services to the project (for example, development of the project brief, architectural services, engineering services, construction management services), or can provide goods to the project (for example, constructed assets).’ (ref PAS 1192-2).

This catch all definition suggests that the term ‘supplier’ could be used to refer to contractors, subcontractors, consultants, suppliers and service providers.