Construction Headaches: Subs of Subs of Subs

It wouldn’t be construction if there weren’t “issues”. None of us like to hear that word in our industry (if I had a nickel for every time I receive the call, “Tammy, we have an issue onsite…”)! However, issues do exist, and they can be incredibly difficult to deal with. They can make or break a contract, and frequently affect the overall safety, compliance, production, quality, and profitability of our projects.

One of the most challenging issues on construction projects today centers around dealing with subs of subs of subs. I know I’m resonating with this one because I hear about it, and personally deal with it on just about every project. Many are wondering why this has become such a problem in recent years, so let’s examine the facts.

Since the rebound of the construction industry after the recession of 2008, the industry is dealing with some very new, and very different challenges than what we dealt with before the recession. These challenges have created a very different industry than what existed prior to the recession, and the results of the new challenges are being felt on almost all projects today. They are also resulting in many new types of “headaches” for project and site leaders/managers.

First, the construction industry was hit so hard during the recession that parents began to steer their children away from considering construction trades as a viable career option. I saw this first-hand with my work teaching in the K-12 Tech Centers. While the construction-related school programs were experiencing low enrollment numbers for years, many of the skilled trades workers were retiring.

Second, the younger generation are very tech-savvy, with most favoring high-tech jobs over manual work. There are far fewer young people entering the industry and training for highly-skilled trades work via trade schools, apprenticeship programs, etc., which is contributing to a severe labor shortage. The industry is strong again, but contractors are now feeling the effects of this severe labor shortage.

Third, there are more undocumented aliens working in the United States today than ever before. Many are starting their own construction businesses, yet they often have no training or knowledge of proper procedures, quality standards, safety/compliance requirements, etc., and are willing to work for extremely low pay. When you couple all of this with regulatory agencies that have become very aggressive since the rebound of the industry, it’s a perfect storm.

So how do we solve these issues, or at least manage the issues that our subs of subs of subs create so we can get the work done without affecting our safety, compliance, and quality standards? Is it even possible? Believe it or not, it is!

The most important aspect in managing our subs’ subs is proactive communication. Holding a pre-construction kickoff meeting with all subcontractors (or at the least a pre-start meeting with the smaller groups of subs that typically begin their work onsite about the same time) is crucial for setting the tone of the project, reviewing safety requirements, enforcement policies, and expectations, and addressing potential issues such as 2nd and 3rd tier subs on the project. It’s critical to recognize that your subs may be hiring subs of their own so you can have a plan in place before construction begins.

The contract for the project is held between the controlling contractor and the individual subcontractors, not 2nd and 3rd tier subcontractors. It is the job of the controlling contractor to clearly communicate all expectations to their subs. They must be made aware of all site rules and safety requirements, pre-construction, and be reminded that if they are utilizing their own subcontract labor, it is then their job to clearly communicate the site rules, safety requirements, and enforcement policies on down the line.

The controlling contractor must also communicate to their subs that any noncompliance onsite will be considered their noncompliance, as the contract holds the 1st tier subs accountable for complying with all requirements. Encourage them to hold their own meeting with their subs to communicate the information and the requirements to those who will be onsite actually performing the work. They must hold their own subs accountable.

The second aspect of dealing with this issue effectively is enforcement. The controlling contractor must have a solid enforcement policy in place for dealing with noncompliance on their projects, and they must consistently use it! The company policies must be stated in the contract documents, but it is not enough to leave it at that and assume the subs will read it on their own and comply—the enforcement policy must be clearly communicated during the pre-construction meetings. I hear many project managers state, “Well, that’s all stated in our contract, so they should know”. Yet these same companies are struggling with noncompliance on their projects because of their subs’ subs. The controlling contractor must take the additional steps of holding pre-construction meetings to communicate these requirements in person if they want to resolve this issue.

Controlling contractors must fully understand the “big picture” of what has happened within the construction industry over the past 10 years and their role in helping to resolve the problems created by these industry changes, if we are to experience true change.

We’ve discussed the most important aspect for dealing with this issue, which is communication. Most organizations struggle with good communication, which is a leading cause of failures. We’ve also discussed the importance of consistent enforcement, with proper documentation of all enforcement activities. But there is one additional, and very important aspect to solving this problem, and that is education.

The recent industry changes have collectively put a controlling contractor at significant risk for citations and penalties today as they are being cited for unsafe and/or non-compliant activities of their subcontractors on site. This becomes especially concerning when there are 2nd and 3rd tier subs on site. As a result, controlling contractors must realize that they have no choice but to come alongside their subs and help educate them. If we are only as good as our subs, then how can we not do this?

Helping our contractors who want to do it right, but simply do not have the resources to do so, is the best way I have found to ensure safer, more compliant projects. So how can we help educate our subs and resolve the issues with their subs? In several ways, actually.

First, open up your own internal company trainings to all your partner subcontractors! Offer them the opportunity to participate in legally-required trainings, and even optional trainings that they may not have the money to pay for themselves. This will solidify your partnerships and show goodwill, and it will naturally help to raise the bar on your projects as your subs become more safety-educated.

Second, provide resources and help to them with safety documents. They may be struggling with their own internal safety program, manual, and other documents, so offer some assistance to ensure they are compliant. It takes a little time and effort, but the results are so beneficial that they are measurable!

Third, as we help them, we also instruct them that they now have the responsibility to educate their own subcontractors, as they are directly responsible for their subs in the same manner the GC is for its subs. I have seen great gains in the way of safety performance and compliance by embracing the role of educator today, and teaching our subs how to do the same. An educational approach to this problem is incredibly successful and rewarding. Wishing you safe, compliant, and collaborative success on all your projects!

 

Tammy K. Clark is a construction industry Safety & Quality Consultant with over 20 years experience as a business owner, consultant, educator, and speaker. Tammy has worked with renowned clients nationwide. She is a member of ASSE, former Chair for the NAWIC National Safety & Health Awareness Committee, and was nominated as one of the Grand Rapids Business Journal’s 50 Most Influential Women. You can contact Tammy at tammy@tammykclark.com or visit her website; www.tammykclark.com.