A key part of resourcing for the work that is required to be completed on larger construction project includes contracting-out some or all of the project to subcontractors. Owners and general contractors will typically subcontract the entire project, but even subcontractors themselves will sub-out work to do specialty contracting or to supplement their own workforce. With the new subcontracting extensions to the 4castplus procurement module, this process is significantly streamlined as subcontracts can be created and issued right into the project. Subcontracts are created and issued in the same easy way that 4castplus purchase orders are, so the robust and flexible interface is familiar, easy and secure.
A “Subcontract” can be created on various different contract terms including:
- Fixed Price
- Unit Price
- Time & Materials
Each subcontract type has its unique attributes for how it is defined, budgeted and received. Fixed price contracts, for example, are based on lump-sum service items (pay items) that can be received by progress, milestone or lump-sum amounts. Unit price, on the other hand, utilize units of quantity, with a unit price, for each item to define the value of the contract along with how it is received: i.e. by progressed quantities of completion. Time & Materials contracts use a defined vendor rate table. Subcontractors submit hours of labor, equipment, expenses, materials, etc. and the system will calculate the received amounts by that rate table.
Subcontracts can also be setup with metrics for tracking ongoing productivity. For example, on a fixed price subcontract, users can enter the estimated service manhours, along with units of quantity, estimated daily average, etc. so that the system can calculate productivity metrics such as:
- Hours per unit
- Dollars per unit
- Productivity factor
- Dollars per hour
- And more
This gives the user insight into how well each contractor is performing compared to original plan.
Subcontracts can also be setup with a payment schedule that defines milestones, progress events, advanced payments, holdbacks, and other key events that influence how the subcontract will be paid over time. 4castplus provide a “Payment Schedule” module for this purpose to enable users to plan out all cash outflow events, with payment terms, to get a real picture of how funds will be paid out.