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« Energy-Saving Performance Contracts Reportedly Gaining ‘Renewed Interest’ | Main | Worldwide Market for BIM Software, Services Expected to Boom over the Next Eight Years »

06/28/2012

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Public work projects in our area do not have this restriction, and it has been a long time since we have dealt with it. As Owner's project managers, we fail to see what public interest is served.

Prime contractor's are required to take full responsibility for their subcontractor's activities and performance. We look to prime contractor's for their construction management expertise and their financial strength. Requiring them to perform the work with a set percentage of their own forces serves only to limit competition, and the level of specialized expertise that can be brought to the project.

It true a prime contractor performed no actual work with its own forces, maintaining only a supervisory presence at the site. As damages for breach of the subcontracting limitation, the prime’s contract price was reduced. The contractor was paid only its direct subcontract costs, plus administrative and bonding costs.

We have seen this used when prime contracts are issued to specialty trades (i.e. concrete, drywall/metal studs, masonry, etc..) on project. The Construction Managers have become tired of subcontracting brokers bidding the work and then using multiple subcrews to perform the work since the broker does not really have a payrolled staff that can actually perform the work. The multiple subcrews seem to have their own individual focus instead of focusing on the project as a whole. The Construction Managers have also said the multiple subcrew approach seems to increase the odds of problems developing and also realize that if the suubcrews were truly qualified they would bid on the project directly and cut out the middleman broker.

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