Who does a subcontractor answer to on a project?

The general contractor, or construction manager, that hired it, not the owner directly. A subcontractor’s subcontract is with the GC, so its schedule commitments, payment terms, and change-order process all run through the GC, who in turn coordinates every trade against the owner’s contract and the overall schedule. The owner typically has no direct contractual relationship with a subcontractor at all, which is why payment disputes and delay claims from a sub are usually resolved against the GC, even when the root cause traces back to an owner decision.

Can a subcontractor hire its own subcontractors?

Yes, this is common on larger or more specialized scopes, and it is usually called a sub-subcontractor or second-tier sub. A drywall subcontractor might sub out the metal framing portion of its scope to another specialty firm, for example, while remaining fully responsible to the GC for the whole package. Each layer down adds another subcontract and another party whose payment and performance the tier above it has to manage, which is why payment bonds and lien rights matter even on relatively small trade packages, the money has to flow correctly through every tier.

How is a subcontract different from the GC’s contract with the owner?

Scope and party. The GC’s prime contract covers the entire project and sits between the GC and the owner; a subcontract covers one defined trade scope, electrical, concrete, mechanical, and sits between the GC and that one subcontractor. The prime contract’s price becomes the GC’s revenue; each subcontract’s price becomes a piece of the GC’s cost. A subcontractor only sees and is bound by its own subcontract, it has no visibility into the prime contract’s terms, the other subs’ pricing, or the margin the GC is keeping between the two.

Construction Glossary · Roles & Parties

Subcontractor& the Sub Tier

Most of what gets built is built by subs. Each one answers to the GC, sees only its own subcontract, and carries the risk of its own trade.

Definition

A subcontractor is a specialty trade contractor hired by the general contractor, or construction manager, to perform a defined scope, electrical, mechanical, concrete, under a subcontract. Most of the physical work on a project is performed by subs, not by the GC itself.

One trade, one subcontract

The GC fans the project out to as many trades as the scope needs. Each subcontractor sees the box it was hired for, its own subcontract, its own schedule dates, its own scope, and nothing of the trades on either side of it.

What a sub carries vs what it does not

A subcontract is narrow by design, which is exactly what makes a specialty trade workable on a project with dozens of other trades.

Carries	Does not carry
Risk and price of its own trade scope	Risk for other trades’ scope
Its own schedule dates and crew	The owner’s prime contract terms
Its own subcontract with the GC	Visibility into the GC’s margin

A sub’s price is one line on the schedule of values, and once its subcontract is signed, that line becomes a committed cost on the GC’s budget.

How POD handles the sub’s view

POD gives a subcontractor their own scope, their subcontract with the GC and the work under it, not the whole project. On POD’s role-based access the Sub role is scoped to their contract, so a sub sees what they are accountable for and nothing of the other trades’ commercials.

POD field reporting software

Frequently asked questions

Its scope, its line, its risk

A subcontract is narrow on purpose. The sub owns its own trade; the GC owns the job of making every trade fit together.

Schedule of Values Back to the Glossary