Everything you need to know about subcontractor management
The construction industry is booming, but that’s causing shortages of skills and holding projects up. Subcontractors provide a solution - but only if your subcontractor management is up to scratch.
Now the UK construction industry is picking up speed, the supply of work is causing its own problems, with materials scarce and skilled labour sometimes even scarcer. London’s biggest contractors are turning down one in three bidding opportunities due to labour shortages.
Subcontractors have long played an important role in helping construction companies source the skills they need in a flexible way – the more work, the more subcontractors you can take on to help out. Now, many large companies sub-contract much of their work, but subcontractor management can be a headache when you have multiple subcontractors at once. For instance, you have certain legal obligations you need to meet, including health and safety regulations.
The knock-on effect
Operationally, using subcontractors may mean certain issues arise. For instance, you are likely to face problems with keeping to timelines - if one subcontractor is late, then it can have a knock-on effect for others. Even in a simple project such as installing a bathroom, if the plumber or the tiler is delayed, the job can over-run substantially.
Communication is also an issue when you are commissioning work from people who are not part of your own company. If you don’t have an effective way for subcontractors to feed their progress back to you, it can be hard to keep track of how a project is developing.
Maintaining a steady cash flow is also a big challenge - you need to ensure you're paying for the work done, but then the Fair Payment Charter could come back to bite you. Subcontractor management requires a relentless focus on project management, coupled with effective processes to keep two-way communications channels constantly open.
For busy companies with complex projects on the go, subcontractor management can be made immeasurably easier by using the right kind of construction software. For instance, good construction software can help you keep the taxman happy by keeping you in control of your CIS situation, and ensuring you can see which tax payments have been made. This kind of system automatically keeps you up to date with CIS legislation too. Construction software can also help with your subcontractor management by giving visibility of progress on projects by maintaining timely, accurate and reliable data.
Effective systems can help you keep track of when payments to subcontractors are due or have been paid. Successful construction companies invest in software systems that ‘join-up’, linking procurement, accounts and other databases – including subcontractor details - to give them instant access to all the information they need to enable them to make informed decisions and prepare accurate estimates.
After so many lean years, we all know it goes against the grain for many construction companies to be turning down chances to bid for work. The well-organised use of subcontractors - supported by ironclad processes and suitable software - can provide a lucrative and practical solution now and in the future.
- Subcontractors provide a flexible, skilled solution to labour needs but they can cause organisational problems.
- Successful construction companies know rigorous project management and communications are crucial to good subcontractor management.
- Investing in good construction software can help you keep track of subcontractors – and keep projects on track.
Project management is just as important as managing your subcontractors. Find out more about realistic tenders and accurate forecasts in the guide: Top Tips to Keep Costs Down With Better Construction Project Management.
Masdar, PT PLN begin work on floating PV solar project
UAE-based renewable energy company Masdar, in partnership with PT PLN, an organisation specialising in electrical power and owned by the Indonesian government, has announced today it has started work on a floating photovoltaic (PV) solar project in West Java. The company says the 145MW plant is the first of its kind in the country. The project, which will be constructed on the Cirata reservoir in West Java, was financed by the Sumitomo Mitsui Banking Corporation, Societe Generale, and Standard Chartered Bank.
Developing the project is PT Pembangkitan Jawa Bali Masdar Solar Energi (PMSE), a joint venture between Masdar and PT PLN subsidiary PT PJBI. Bahlil Lahadalia, Minister of Investment for the Republic of Indonesia and chairman of the Indonesia Investment Coordinating Board, said: “This is a flagship project of the UAE’s investment in Indonesia, and most importantly, it is in line with the Indonesian Government’s target to increase renewable energy by 23% by 2025.”
Ladhadalia added: “The Ministry of Investment fully supports the investment realisation of the Cirata Floating Solar Project by PT PJBI and Masdar.” The plant is said to be the largest in south-east Asia, and one of the biggest in the world. Around 800 jobs will be created during its construction phase.
During the project’s development, Masdar has conducted several social initiatives to raise awareness of sustainability and strengthen the engagement of the local community. Talking about the partnership with Masdar, Amir Faisal, president director of PJBI, said: “We see tremendous potential for similar projects in Indonesia and we look forward to continuing our fruitful collaboration with Masdar to work on more renewable energy projects and help our nation achieve its clean energy objectives.
“This floating power project is a first for Indonesia and is also a significant step in PJBI’s renewable energy journey,” he added.
Facts about solar energy
- Solar power is the most abundant energy source on earth: There’s enough solar energy reaching the earth every hour to meet all of humanity’s power needs for a whole year.
- The cost of solar panels has fallen by 99% since 1977: The price per watt for a single solar cell in 1977 was US$77. Today that same cell costs Us$0.21 per watt US$0.39 per watt for an assembled module, according to the Solar Energy Industries Association.
- China is the global leader in solar energy: Whilst solar power is increasing in popularity in the US, China is currently the country with the biggest uptake. Research conducted by GTM in 2017 predicted that the US would install 12.4GW of solar power during that year. China, on the other hand, installed 24.4GW of power in the first half of 2017 alone.