Proper subcontractor vendor management and reporting help businesses to grow and be successful by mitigating risks, optimizing performance, and reducing costs.
What is a Subcontractor?
A contractor is defined as a worker who is an independent entity and is separate from an employee. Once a contractor has been hired by a business, they can then hire subcontractors who can assist the contractor in completing assigned projects. Subcontractors will sign an agreement like a contractor agreement, but the subcontractor will sign with the contractor. These contracts go into detail about the services and products that the subcontractor is providing, compensation, due dates for work, along with rules and regulations.
Subcontractor contracts are most found in construction projects. These contracts play an important role in protecting the workers and owners of the projects and outlining the final goals and visions. They provide risk management for projects and the transfer of work to avoid possible legal issues and insurance costs. Once a contractor wins a bid on a job they will assign the design, writing, and editing to subcontractors.
Matching with a subcontractor can be a difficult process for firms who are looking for the right match that meet all qualifications. Ensuring that the subcontractor is a certified firm with the appropriate documentation is critical. Utilizing management services alleviates the pressure off validating and certifying subcontractors, which is often a labor intensive process.
Benefits of Subcontractor Vendor Management
Vendor management is defined as “a discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle”, according to Gartner. Subcontractor vendor management consists of recruiting and managing vendors in order to execute the project at hand in an efficient way.
Vendor management helps companies select the right vendors, and categorize those vendors to ensure the right contract, metrics, and relationship. It also helps businesses to determine the number of vendors needed and mitigates risk. Vendor management helps organizations develop, and control vendor contracts, performance, and relationships in order to efficiently deliver contracted products and services. Benefits of vendor management include:
- Better Selection
- Better Contract Management
- Better Performance Management
- Better Vendor Relationship
- Better Value
Clients are then able to meet business objectives, minimize disruption, avoid failure in deliveries, and engage in more sustainable business while driving value for the business.
Having subcontractor vendor management helps to streamline the bidding and estimating process by associating specific jobs with vendors. It also organizes and stores all vendor information in order to verify vendor credentials in an efficient manner. Management services also oversee obtaining your material, equipment, and service contracts to ensure consistency and to create a unified framework for communication between the employer and the contractor. This results in less non-compliant behavior from subcontractors.
Benefits of Subcontractor Vendor Reporting
In order to be able to track compliance with subcontracting requirements, large businesses must submit regular subcontract reports. Important things to consider during this process is frequency, formatting, and the information included in the report. Information to include in the vendor report consists of:
- Vendor risk issues
- Any new or changing regulatory requirements
- Industry highlights
- Third-party risk management program metrics
- Summarized due diligence
- Information regarding vendor risk assessments
- A reporting timeline
You can then deliver these insights to stakeholders throughout the company.
Maintaining a consistent vendor risk management reporting routine helps to ensure your organization’s leaders are always informed about emerging risks and activities. It can also aid in enabling strategic decisions and taking corrective actions when necessary.
Contact Complete Contract Consulting Today!
At CCC, our team matches your firm with the right subcontractor to help your business thrive. Through our subcontractor matching, ensuring compliance, reporting, and management services we ensure your vendor management processes run smoothly.
Contact CCC today to find out how we can streamline your processes today.