The final guidance note in the UK Black Book series, Subcontracting, has now been published. Structured in three parts in line with the APC levels – knowing, doing and advising – the publication addresses the relationship between a main contractor and their subcontractors.
The first section of the guidance note looks at what subcontracting is, providing a brief history of the concept; the initial reason for subcontracting was the introduction of an employment tax in the 1960s, which meant that there was an incentive for main contractors to remove employees from the direct payroll, thus saving on tax expenditure.
This is followed by an overview of its current status in the UK, and an examination of the advantages and disadvantages of subcontracting on any particular project.
There is comprehensive commentary on the different kinds of subcontractor in the UK, which are a result of the wealth of different procurement models used and the variety of standard forms of contract. The commentary covers different types of subcontractor such as trade or works contractors, and explains how these differ from traditional subcontractors.
The second section covers procurement and tendering strategies, with comprehensive guidance on the process that should be followed.
The note examines the basis and principles of a generic subcontract document and provides an overview of the forms available, including those from JCT, CIP, NEC, CECA, ACE, ACA and FIDIC. Amendments to these forms are also covered.
The third section builds on the previous two and includes information on the various dispute resolution routes available, with a particular focus on adjudication, arbitration and subcontractor insolvency.
Nevertheless the guidance note is still relevant to quantity surveyors and project managers in a variety of roles. Subcontractors are vitally important to the success of construction projects, and as such RICS professionals should ensure they fully understand subcontracting provisions.
Related competencies include: Commercial management, Contract practice