Contractor vs subcontractor: What is the difference?

Written by LetsBuild

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Contractor vs subcontractor

Both contractors and subcontractors are indispensable for the development and completion of a construction project. Despite their integral role, though, there are still many who don’t really understand the key differences between them.

In an effort to clear away confusion, we have prepared a useful guide which describes in detail what unites and separates a contractor and a subcontractor from each other. Hold tight and find below all you need to know about the role of a contractor and a subcontractor during the building process.

What is the role of a contractor

A contractor could either be a company or a person whose goal is to obtain and complete contracts. Contractors could be parallelised to business owners as they are in a position to work independently, create and maintain their own clientele and freely handle any deals that come their way.

In construction, a contractor provides the client with a certain set of skills and services (eg. labour and materials) once a contractual agreement between the two sides has been reached.

The profits for a contractor can be, of course, greater than those of other project parties (eg. workers) as it’s him who has managed to talk with the client and enter into a final agreement. As a consequence, the contractor owns any profits resulting from work included in the contract.

The role of a subcontractor

A subcontractor could be described as a different type of a contractor. More analytically, it is a person or a firm that completes work for a company on a contractual basis. A subcontractor is a part of a larger project and normally provides more specialised services (eg. plumbing) to the client than the contractor.

Find here: What’s the cheapest way to build a house?

Subcontractors are found by the contractor and they seal agreements with them instead of the client. That is a key difference when we are comparing a subcontractor to a contractor. In other words, subcontractors are working for the contractor.

Their specialisation allows them to participate in different construction projects at the same time. Once they have fulfilled their role, they can proceed to the next project.

In general, a strong and active network is of substantial importance for subcontractors. The more contractors they know the easier it gets to find new projects to work on. In that sense, a subcontractor can always stay busy as long as s/he has a solid connection with contractors.

Contractor vs subcontractor: The key distinctions

Now that we have a better understanding of what the actual role of a contractor and a subcontractor is, it’s time to dig a bit deeper and delve into the key distinctions between the two sides. In short, we could categorise them to the following:

Different point of focus

As a continuation of what we mentioned before in regard to the importance of a good network for subcontractors, it doesn’t take much effort to understand that the area of focus for a contractor and a subcontractor isn’t the same at all.

On the one hand, you have contractors whose primary focus is to build a solid reputation which in the long-term will allow them to attract new customers and work with them on mutually beneficial projects. To achieve that, they need to consider customers as their first and foremost priority. Only then, they can get good referrals and keep their business growing.

On the other hand, subcontractors normally have a quite different focus and mindset. It goes without saying that they also want to do a good job for the client, but they want even more to establish some beneficial connections with the contractor. In that way, they can stay active in the market and receive new work on a  continuous basis.

Contractors care for the bigger picture

A contractor and a subcontractor may work on the same project but they are doing it from a completely different perspective. From a contractor, you expect to focus on the bigger picture and be prepared to provide essential solutions to a plethora of issues, from financials to hiring subcontractors and meeting with the client.

In a sense, it is no exaggeration to claim that a contractor should be seen as an all-around manager. Depending on how efficient s/he is during the development of the construction process, a project can be a success or a costly failure.

Subcontractors specialise in a particular area

If the contractors are seen as the multi-tasking managers of a construction project, then the subcontractors should be regarded as the experts of specialisation. As a rule, subcontractors focus on a particular aspect of the building process (eg. plumbing, insulation, drywalling).

subcontractor definition

Their responsibility is to complete successfully and within the set deadlines, the project tasks that have been assigned to them. That being said, a subcontractor should prioritise service and product delivery according to his/her expertise.

The good news for subcontractors is that they can work independently and they only have to focus on their tasks. The bad news is that they typically earn less than the contractors and have less influence on the project.

Common pitfalls for contractors

Being a contractor signifies that sooner or later you will have to hire a subcontractor. Without a doubt, the customer is expecting from you to take a good decision and pick the right man for the job.

As you can imagine, this isn’t always easy. For example, you may end up hiring an inexperienced subcontractor whose work might not be of the best quality. In such cases, project disputes are likely to emerge between you and the subcontractor.

But the worst is that this conflict can harm your relationship with the client, as well. Long story short, you will be the one who should put this mess in order. That can be a challenge.

Read also: 10 important questions to ask a general contractor

What is more, serious problems can also appear if the agreed deadlines aren’t followed successfully. In such cases, you will be most probably held responsible by the client for the delay.

To make matters worse, if you decide to part ways with your subcontractor there’s always the chance that this decision would be seen as ‘break of contract’ and could even cost you the project.

For that reason, you should always be extra careful on the selection of your subcontractor(s) since they represent your company at the end of the day.

LetsBuild for contractors

At LetsBuild, we understand well how challenging the work of a contractor can be. Taking that into consideration, we have tried our best in order to help you regain control of your projects.

Explore LetsBuild today!

With the help of our platform, you can effortlessly monitor the projects that proceed as they should and those which fall behind. By utilising technology which is connected to the bottom line, you can improve margins across your projects.

Nhh contractors

In a nutshell, here are some of the ways LetsBuild can put you back in charge of your project:

  • With the help of collected project data, get a better understanding of your project mistakes and learn from them.
  • Gain access to full project audit trails and documentation of who did what and when.
  • Minimise the risk of someone leaving the project.

These elements can contribute decisively to optimising project collaboration across departments and empowering the connection between the office and the site. Like that, you can help your team be more consistent and you can optimise project delivery.

LetsBuild for subcontractors

Being a subcontractor is no child’s play. There is a constant need for efficiency, transparency and on-time project delivery. LetsBuild can be a valuable ally for every subcontractor in this challenging journey.

With one place for collecting and keeping all project data, you can share the right information with the right people in real-time. Thanks to that, you can make sure that everyone is on the same page and that costly delays or mistakes will be avoided.

On top of that, you now have the opportunity to monitor the progress of different projects across the company and easily drill down to detect the information you need.

Explore LetsBuild today!

For more information on how LetsBuild can help subcontractors change the way they work, take a look at the following video of our collaboration with Juul & Nielsen:

Wrapping it up!

Either you are a contractor or a subcontractor, there is a vast number of tasks and responsibilities that you need to focus on. A top contractor should be able to manage many different aspects of a construction project at the same time while ensuring the stability and continuous development of the project.

Regarding the role of a subcontractor, the quality of the work and the on-time project delivery appear to be two extremely valuable elements.

In both cases, the contribution of digital tools can be substantial. A reliable project management software can help with regaining control of the project and optimising collaboration between the construction site and the office.

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