A general contractor is like the head coach of a football team: the buck stops here. When there are problems on a construction project, the owner expects the contractor to fix them.
Sometimes a contractor can compel the subcontractor who caused the problem to fix it. For example, if the HVAC system isn't working properly, the contractor can have the HVAC subcontractor patch the leaking ducts or re-balance the system. But sometimes it doesn't matter who or what created the problem; it is the contractor's responsibility to fix it. When such responsibility is imposed by law, it is called a non-delegable duty.
All of a contractor's most important non-delegable duties involve subcontractors. These duties involve three primary areas: hiring qualified, competent subcontractors; ensuring job site safety; and preventing construction defects.
Hiring the Right People
Perhaps a contractor's most critical function is selecting the right subcontractors. Hire the right subcontractors and safety problems, construction defect problems, insurance issues and the myriad of other problems that plague contractor/subcontractor relationships either disappear or are reduced to a bare minimum.
Making careful hiring choices doesn't just affect your stress level. Contractors are legally responsible for the consequences of hiring subcontractors who are not qualified to do their assigned jobs.
In selecting a subcontractor, you can't simply choose the lowest bidder. In fact, a bid that is significantly lower than the next lowest should raise some red flags. In these situations, the contractor should confirm that the bidder has the correct project specifications and has prepared his bid accordingly. Even then, the careful contractor should monitor the subcontractor's work to ensure that project specifications are met and progress is on schedule.
In a perfect world, the contractor knows the potential subcontractors through past experience or word of mouth. But jobs can't always be staffed from a Rolodex. Maybe none of the usual suspects are available, or the project's specifications require a certification they lack. This is when the contractor must perform his due diligence and investigate whether the subcontractor has the necessary expertise and resources to get the job done. It is essential to ask whether the subcontractor has done similar jobs, request client references and copies of previous shop drawings, and speak with the company foreman.
The contractor must be certain that the subcontractor will not be overwhelmed by the project's scope and schedule, and has the manpower and management tools to meet the scheduling requirements. Past performance does not always predict the future, but failure to investigate a candidate's track record may leave the contractor liable for scheduling delays caused by hiring unqualified subcontractors.
The contractor should also ensure that the subcontractor has the requisite financial resources for the project. Using partial payments from one job to fund another is an invitation to litigation. One way to check on a company's financial stability is to contact its suppliers and ask if it pays its bills promptly. For protection moving forward, insist that the subcontractor provide releases from its suppliers. It might be wise to consider arranging to use two-party checks, or a joint checking account for purchasing materials. And when dealing with an unfamiliar subcontractor, tight deadlines, and large amounts of money, it would be wise to ask for a performance bond.
Construction sites are inherently dangerous places. In these hazardous environments, in some states, the contractor bears the ultimate responsibility for job site safety, making subcontractor selection more crucial than ever.