Subcontractor perspectives: factors that most affect their relationships with general contractors, a Pacific Northwest study

Patrick James McCord

A Pacific Northwest study to determine the most important factors in the general contractor-subcontractor relationship. Subcontractor perspectives are presented about the factors that affect their relationships with general contractors. Interviews are conducted with twenty four subcontractors from eight disciplines to evaluate their opinions about the general contractor's personnel, procedures and practices that improve or damage their relationships. The study reveals the top three relationship factors to be bid shopping, project manager relationship and superintendent capability, respectively. A mixed method research design is utilized where subcontractors are asked to determine the importance of each factor through their experiences with general contractors. Participants are also asked to rank their top three relationship factors and determine which factors are important enough to end their relationships with general contractors. Relationship factors included in the study are listed in order of importance as determined by subcontractors using the average rating on a ten point scale: 1. Bid Shopping 2. Project manager capability 3. Project manager fairness 4. Superintendent 5. Timeliness of Payments 6. Safety 7. Financial capacity 8. Retainage practices 9. Future work 10. Previous claims 11. The pay-when-paid clause 12. Indemnity clauses 13. Backcharging 14. Insurance 15. Bonding 16. Takeover of equipment 17. Termination for convenience NVivio 8 software is utilized for analysis of data to determine trends and correlations. Subcontractors stated that bid shopping is a serious betrayal of trust with 18/24 respondents indicating that they have ended a relationship after being bid shopped. The project manager and superintendent have key roles in maintaining the subcontractor relationship; honesty, fairness and capability were determined to be their most important traits. Payment issues ranked fairly high compared to other factors. Many subcontractors admitted that they adjust pricing on their bids based on their treatment from general contractors. General contractors that treat them well receive lower pricing on bids and those that don't treat them well receive higher bids or no bid at all. The relative importance of each factor was dependent on the current economic outlook of each subcontractor. Subcontractors tend to align themselves with general contractors that meet their standards of conduct.

Subcontractor perspectives: factors that most affect their relationships with general contractors, a Pacific Northwest study

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