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Avoiding subcontractor disputes

On Behalf of | Sep 28, 2023 | Construction Contracts

According to the 2021 Billd National Subcontractor Market Report, subcontractors were optimistic about growing their businesses with 74% having planned expansions. These workers are an important segment of the construction industry, providing services to contractors to aid in finishing projects.

However, disputes with subcontractors can arise unexpectedly and disrupt a project. For contractors who want to keep relationships harmonious, it can help to learn how to best work with subcontractors to avoid issues.

Open lines of communication

One cornerstone of conflict resolution in construction is maintaining open lines of communication. Encouraging subcontractors to voice their concerns and opinions can help identify issues before they escalate. Establish a culture of regular meetings and progress reports, allowing everyone to stay informed and address potential problems promptly.

Clearly defined contracts

A well-drafted contract serves as a roadmap for the project. Ensure that all agreements are explicit and comprehensive, leaving no room for ambiguity. Contracts should cover the scope of work, timelines, payment terms and any potential variations. When everyone is on the same page from the start, disputes are less likely to arise.

Document everything

Documentation is your best friend when disputes arise. Keep detailed records of all communications, including emails, memos and meeting minutes. This paper trail can serve as evidence to support your position in case a dispute escalates. Additionally, photographic evidence of work progress can be invaluable.

Change orders

Changes in construction projects are common, but they can be a source of disputes if you do not manage them properly. Implement a change order system that requires documentation and all parties to sign off in agreement for all alterations. This helps avoid misunderstandings about scope changes and associated costs.

Payment disputes

Payment disputes are among the most prevalent conflicts in construction. To mitigate this, have a set process for invoicing and verifying the completion of work prior to payment.

Maintain professionalism

Throughout any dispute, professionalism is paramount. Avoid emotional responses and maintain a respectful tone in all communications. This not only helps in resolving the current issue but also preserves relationships for future projects.

Disputes with subcontractors are an unfortunate reality, but they are avoidable with proper project management steps. Remember,  the bottom line is ensuring the project’s success and building a reputation for reliability and fairness in the industry.