Why is Contractor Management Important?

 

(Enty.2023)

Why is Contractor Management Important?

 

First and foremost, it can help to ensure that work is completed on time and within budget. By having a well-defined process for managing contractor, you can help to avoid any potential problem that may arise, such as missed deadlines or cost overruns.

Finally, contractor management can also help to ensure that all contractors are working in compliance with company policies and procedures. This is especially important for those in the healthcare sector. Contract workers in this space must always adhere to HIPAA guidelines.

First,

Workers who don’t follow them could put your business at risk, As a result, you may experience fines and similar penalties. you may also be more likely to get audited in the future.

(Wheeler , 2022)

 

(FasterCapital,2024)

There are some importance point of contractor management as below according to the Simplilearn , (2023) .

1.      Assures contractors work in compliance with organizational policies and procedures.

2.      Ensures that the task is completed on time and within budget.

3.      Sometimes, companies need more specialized workers and seek expertise to perform in extreme conditions. In such situations, the contractors with the required knowledge and capabilities can benefit the company.

4.      Helps in saving the training time.

5.      Contracts provide flexibility in project management and workload.

6.      Contractor management can aid in minimizing the legal and tax issues associated with regular employees. 

7.      Specialized contractor brings the expected results, increasing productivity and efficiency of the task.

8.      The head cost of regular employees employs additional costs, which need not be considered when hiring contractors. Thus, it benefits office space and equipment.

(Simplilearn,2023)

 

Also owners has many benefits with working well managed outsourcing company.so as per the following mention benefits consistently render to the owners as well.   

• The administrative burden of sourcing and managing contractors is removed.
• The contractor best suited for the job is appointed, ensuring optimal asset care and asset performance.
• Pragma has bargaining power and negotiates competitive rates to ensure cost efficiency.
• The client has the assurance that the appointed contractor complies with industry requirements and standards.
• Asset information is readily available for effective decision-making and follow up.
• Long-term contracting ensures continuity and sustainability.
• Risk is reduced by documentation and sign-off being provided at relevant points.
• The client is ensured of the quality of contractor workmanship as it is actively managed.
• The burden of managing stock is removed or reduced.
• A client’s overhead costs are less as contractors are only used when required, giving a flexible and scalable workforce.

(Aberdein , 2022)

 

Conclusion

·       In my view Effective contract management is essential for the success of a business. It helps Reduce costs and improve company performance , , Streamline administrative tasks and improve efficiency Enhance visibility into contracts and their performance, Minimize exposure to risk and ensure compliance with contractual terms and conditions ,Monitor and track key obligations and milestones

 References

Aberdein D., 2022, Why is good contractor management important to your business? (Online)
Available at : https://www.pragmaworld.net/practices/advisory/contractor-management/ [Accessed on 29th march 2024]

Enty.2023 , https://enty.io/blog/importance-of-correct-contract-management (Online)

Available at : The Importance of Correct Contract Management for Your Company [Accessed on 29th march 2024]

FasterCapital,(2024) , Contract Management (Online)

Available at : https://fastercapital.com/blogs.html [Accessed on 29th march 2024]

Simplilearn,(2023), What is Contractor Management and Why It is Important? (Online)
Available at : https://www.simplilearn.com/what-is-contractor-management-article [Accessed on 24th march 2024]

Wheeler T. , (2022), What Is Contractor Management? A Quick Guide (Online)
Available at: https://bradfordjacobs.com/blog/what-is-contractor-management-a-quick-guide/  [Accessed on 24th march 2024]

What is a Contractor Management ?

 

(Disha Jain,2023) 

What is a Contractor Management?

That can clarify as process of managing outside contractors and ensuring that they are meeting the standards set by the main company

This often includes ensuring that they are completing the work they were hired to do on time and within budget. Also this is making sure that they are adhering to company policies and procedures. Otherwise that will came as, improper management can lead to a number of issues.

Common ones include payment complication, improperly conveying project details, etc, Problem like these could be damage the Company brand, as well.

(Wheeler , 2022)

 

According to the Simplilearn ,(2023) if any contractor management decide to working with external contractors with access to skilled professionals in the field and performing required tasks under the company's guidelines” it is define as the contractor management. Companies cannot train their regular employees in contractor management and can hire professionals to execute the tasks with clear obligations. There is no scope for confusion, worry, or dissatisfaction in the performed task in contractor management, as they consider every angle while dealing with the client or the contractor and keep the contract transparent. 

Furthermore, contractor management ensures that the work assigned to the contractor must be completed within the deadline and with perfection, as they are hired for their skills in specific areas. Through this, the budget or time of the company/stakeholders will not be affected. In any case, if a contractor does not follow the policies of the companies, they are charged with fines and penalties.

(Simplilearn, 2023)

 

Contract management can described according to Bhasin H.,(2020) in simple terms as the management of the contract with employees, partners, vendors, and customers. The system includes addressing any problem with the contract, monitoring and making necessary changes if required, actively interacting with involved parties to achieve desired objectives, and to ensure that both the interested parties can surpass each other’s expectations.

 

It is also known as contract administration as the process handles administrative activities associated with contracts like bid evaluation, an invitation to bid, contract implementation, award of contract, computation of payments and measurement of completed work.

 

A contract manager must have the necessary legal knowledge and training to handle the contract management process in an accurate manner. The precise wording is one of the most critical aspects of contract management and should be handled with care to maximize profitability and minimize risks.

(Bhasin , 2020)

 

What is a Subcontractor Management?

(GoContractor ,2024)

Subcontractors hired by Contractor, they must practice subcontractor management to keep projects running smoothly. This is initiate from identifying the project owner’s needs and choosing quality subcontractors accordingly. That can be clarify as part of Subcontractor Management process.

Also it’s their duty to maintain them in on expectation and employer policies when subcontractor hired by Contractor, which is done by creating a subcontractor agreement. This construction document establishes communication and ensures everyone is on the same category.

(Schwartz B., 2023)

 

Also Subcontractor management another definition as per the Jacob Kunken & Taylor Riso (2024), the overseeing, supervision and coordination of subcontractors, profoundly impacts the overall success of a construction project. This integral piece is usually shouldered by the general contractor, constituting a substantial component of their responsibilities throughout the construction process.

Effective subcontractor management sling efforts of various disciplines on a construction project and ensures all trades work cohesively, meet project goals and contribute positively to the overall success of the project.

In this article, we will explore nine key practices for managing subcontractors

Efficiently in order to achieve the best possible results.

(Kunken & and Riso ,2024)

 

Also that can be define as ,Subcontractor management is the systematic approach of optimizing a wide range of activities that are linked with managing subcontractors. These activities stretch from the initial stages of selection and onboarding, through task allocation and performance monitoring, up to the final project completion.

A crucial yet often overlooked aspect of subcontractor management is the development of a strong working relationship with the subcontractors. It requires an environment of mutual respect, open communication, and understanding, which form the bedrock for seamless collaboration and successful project execution.

Regularly evaluate your relationships with your subcontractors. Look for areas where communication, mutual respect, and understanding can be improved.

(Mckenna ,2023)

Conclusion

Contract management is the contract administration between a company and its vendors. also it’s the process through which an organization streamlines the process of entering into a contract and managing it until the end of its term

References

Bhasin H., (2020),T Contract Management – Meaning, Benefits, Software and Best Practices(Online)
Available at: https://www.marketing91.com/contract-management-stages-benefits-best-practices/ [Accessed on 29th march 2024]

Disha Jain,(2023),What is Contractor Management? All You Need to Know (Online)

Available at: https://www.transformify.org/blog/contractor-management/what-is-contractor-management [Accessed on 29th march 2024]

GoContractor ,(2024), What Is Contractor Management? (Online)

Available at:  https://gocontractor.com/resource/what-is-contractor-management/ [Accessed on 29th march 2024]
Kunken J. and Riso T., (2024), Tips for Effective Subcontractor Management [Accessed on 29th march 2024]
Available at: https://www.procore.com/library/subcontractor-management [Accessed on 24th march 2024]
Mckenna C.,(2023) The Comprehensive Guide to Subcontractor Management (Online)
Available at: https://workbuddy.com/blog/subcontractor-management-guide/ [Accessed on 29th march 2024]
Schwartz B. , (2023), Wat is a Subcontractor? Understanding subcontractor management. (Online)
Available at: https://www.projectmanager.com/blog/subcontractor-management-in-construction [Accessed on 24th march 2024]
Simplilearn, (2023), what is Contractor Management and Why It is Important? (Online)
Available at: https://www.simplilearn.com/what-is-contractor-management-article [Accessed on 24th march 2024]
Wheeler T., (2022), what is Contractor Management? A Quick Guide (Online)
Available at: https://bradfordjacobs.com/blog/what-is-contractor-management-a-quick-guide/ [Accessed on 24th march 2024]

 

What’s is a Contractor ?

                                                                        

(Pragma,2024)

First we check what is the type of contractors.mainly hear we can identify two type of contractors.

Ø   General Contractor

Ø   Sub-Contractor

(BigRentz ,2021)

 What’s is a General Contractor?

A general contractor is legally engaged with the owner or developer and takes responsibility for the entire construction project from start to finish. 

They work directly with the project owner and cross-channel teams, including government authorities, local building authorities, designers, architects, engineers, and suppliers.

In addition, general contractors are in charge of hiring and managing subcontractors , specialty contractors, and licensed trades if needed.

Some essential things to know about general contractors include:

• General contractors are responsible for all the materials, equipment, labor, and services needed for the project, including permits, inspections, and enforcing the project’s quality, safety, and standards.
• They manage the construction site and coordinate with onsite and offsite teams to meet the project owner’s goals.
• Many general contractors self-perform their contracts and only hire a few subcontractors.
• Others subcontract nearly all of their work, assembling project teams with the skilled trades they need depending on the requirements of each project.
• Successful general contractors stay abreast of new industry developments and use all the tools at their disposal, including project management software, to keep their projects on track.

(Rajan ,2023)

 

Contractors are professionals who provide skills or services to companies for a fixed period. They may be contracted for a set number of hours, a specific time frame, or for a project’s duration.

Contractors can be self-employed, work independently as sole traders, or run their own limited company. Independent contractors work for themselves and source their clients.

 

However, an umbrella company or agency can also employ contractors. Those who work for a company may not have to find their clients, as they can work with clients sourced by the company. The umbrella company will also pay the contractor and their taxes.

 

Whether working through an agency or independently, contractors can work on one or multiple contracts simultaneously. And with transferable skills, contractors can often work with various businesses

(Still , 2020 )

 

According to Andreou ,(2024) Contractor definition is, You've been thinking about making the leap from employee to self-employed. If contracting is one of the options you're considering,

We'll run you through the basics, including what is a contractor, what it means to be a contractor, how it differs from full-time employment and the type of business structures that contractors typically choose.

( Andreou ,2024)

 

What is a Subcontractor?

A subcontractor is a person, team, or business that is slated to do a certain part of all of another’s project or contract. Often, a subcontractor has a certain field of expertise or task that they specialize in and which is what they are hired for.

(Gausch & Manawis ,2023)

 

Also Subcontractor definition can express as,  Subcontracting is the practice of assigning, or outsourcing, part of the obligations and tasks under a contract to another party known as a subcontractor.

Subcontracting is especially prevalent in areas where complex projects are the norm, such as construction and information technology. Subcontractors are hired by the project's general contractor, who continues to have overall responsibility for project completion and execution within its stipulated parameters and deadlines. This can create a subcontractor risk for compliance.

KEY TAKEAWAYS

• Subcontracting refers to the practice of bringing in an outside company or individual to perform specific parts of a contract or project.
• In most cases, a company subcontracts another business to perform a task that cannot be handled internally.
• In the construction business, a general contractor typically organizes several subcontractors that specialize in specific trades.

 (HAYES , 2021)

According to Rajan ,(2023) “A contractor is a business or entity that agrees to perform work under the terms of a contract.”

That means contractors are independent businesses hired to perform a specific work or to produce a particular result according to the terms laid out in a contract. 

Hence the name, contractor.

Within the construction industry, contractors may take the form of a full-scale construction company with many employees or a single individual.

(Rajan ,2023)

 

 Conclusions

A contractor refers to a person who's hired to perform certain tasks for a construction project. Contractors include general contractors, subcontractors .Like business owners, contractors work for themselves. They essentially work as a manager and serve as the main point of communication for a construction project.Contractors may hire subcontractors to do part or all of the work for a construction project. When they hire subcontractors, they create subcontractor agreements which protect both them and the subcontractors.

 

References

Andreou C. (2024), What is a Contractor? (Online)

Available at : https://www.goforma.com/limited-company/what-is-a-contractor [Accessed on 24th march 2024]

BigRentz ,(2021) ,Contractor vs. Subcontractor: What Are The Key Differences? (Online)

Available at : https://www.bigrentz.com/blog/contractor-vs-subcontractor [Accessed on 24th march 2024]

Gausch K.& Manawis R. (2023), What is a Subcontractor? (Online)

Available at: https://safetyculture.com/topics/subcontractor/ [Accessed on 24th march 2024]

HAYES A. (2021), Subcontracting: How It Works, Benefits, Definition, and Taxation (Online) 

Available at : https://www.investopedia.com/terms/s/subcontracting.asp [Accessed on 24th march 2024]

Pragma,(2024), Contractor management (Online)

Available at :https://www.pragmaworld.net/practices/advisory/contractor-management/ [Accessed on 24th march 2024]

Rajan S.,(2023),What is a Contractor? Exploring Contractors, Subcontractors, and Trades (Online)

Available at : https://linarc.com/buildspace/what-is-a-contractor/ [Accessed on 29th march 2024]

Rajan S.,(2023), What is a Contractor? Exploring Contractors, Subcontractors, and Trades (online)

Available at :https://linarc.com/buildspace/what-is-a-contractor/ [Accessed on 29th march 2024]

Still S. (2020), What Is a Contractor? (Online)

Available at : https://www.chas.co.uk/blog/what-is-a-contractor/ [Accessed on 24th march 2024]