Contractor differences: In-house vs Sub

A contractor works on various elements of a project. You building contractor will use either an in-house or sub-contractors for your project. Each completes similar tasks but it’s who pays them that differs. Understanding the difference will bring clarity to your project, quotes and payments.
 

Sub-Contractor:

A sub-contractor specializes in one specific skill and so becomes an expert in this trade. They charge a rate per project. When the main contractor deems their work satisfactory, he will pay them. Examples of subcontractors would be bricklayers, tilers, painters, etc. Construction companies may have agreements with their preferred sub-contractors. Especially those who offer good rates and quality workmanship.
 
Sub-contractors are people or companies hired by the appointed main contractor. They complete a specific task within the build process. Sub-contractor rates get calculated and added to quotes at the beginning of a project. They are thus invoiced to the client as the project progresses on a monthly basis.
 

In-house Contractors:

An in-house contractor is an employee of the appointed main contractor. They perform various tasks within the building project. More of a ‘jack of all trades’, they could be plastering one day and tiling the next. Although they have a general understanding of each trade, they will not become an expert in them.
 
Their fees are the main contractor’s responsibility. So they are not billed to the client. The management fees charged for the project will cater for this.
 

Pros and Cons:

With the current South African economy, more companies are choosing sub-contractors. This has its pros and cons of course but is most effective for smaller companies. Those who are not in a position to manage the overheads of such a large staff compliment. Employing sub-contractors ensures that quality tradesmen are being used in a project. It also promotes job creation.
 
The biggest benefit is that the management fee of your project should not be excessive. With all costs approved in the quoting phase, you will have better control of your project.