Problems with specialist subcontracting in the construction industry

Abstract

It is envisaged that more and more specialist works will be employed in modern buildings for enhancing performance and sustainability. Subcontracting is an economical way of procuring specialist works for modern buildings but it may also give rise to various kinds of problems. Such problems may originate from the characteristics of the specialist works and from subcontracting as a procurement method. In the paper, the key characteristics of specialist works are identified and their implications are analysed. Through discussing how new technologies penetrate the market, the pricing strategies that vendors of new technologies may adopt together with their implications are unveiled. The problems with procuring specialist works through subcontracting are then reviewed, and the issues that building developers should take note of in deciding to equip a building with a specialist work and in procurement and management of the specialist subcontract are highlighted and discussed. Practical application: By providing an in-depth exposition on subcontracting within the construction industry, the paper can act as a source of information and guide for those initiating and managing projects that involve substantial amounts of subcontracting, especially to project clients when they procure specialist works through subcontracting. The potential problems discussed include not only those that may arise during the construction stage, readers' attention is also drawn to the impacts on operation and maintenance and the aftermarket monopoly power of vendors of proprietary products and services. © The Chartered Institution of Building Services Engineers 2006.