Every job has its own unique demands, and sometimes those demands will outstretch the capacity of your firm. That’s when it becomes necessary to hire a subcontractor to complete the smaller tasks in order to get the greater job done. While some contractors have long-standing, productive relationships with subcontractors, others must choose from a list of whoever is available. Making the wrong choice can be costly to a contractor’s finances and reputations. How to find a good contractor? Avoid choosing the bad ones; here are a few red flags to watch.
The obvious knee-jerk response to this issue is that one should always avoid working with anyone who is uninsured. That is certain. However, it goes deeper. A subcontractor that has cut-rate insurance might also be a major hazard to work with because that is the sign of someone who doesn’t prioritize safety. Thus it’s not simply a question of “if” the subcontractor has insurance, but also what kind of insurance they have.
2. Licensed… Locally… and Recently
This is another issue where the details matter. Yes, one should avoid hiring anyone who is unlicensed, but it goes deeper. Also avoid hiring people who are licensed in other regions, but not locally. For example, a California contractor should not hire a subcontractor who is licensed in Arizona and Nevada, but not California. That person could likely get the job done, but there is still a heavy risk. Similarly, avoid anyone whose license has expired, even temporarily. Sure, they might be able to get the job done, but there is a risk. This applies to the subcontractor and whoever they hire.
Good subcontractors have years of experience and are willing to discuss their past work. They don’t take offense to questions about their body of work, and in fact encourage it. They can provide details of what they did, the exact timeline they worked on, and the results of their labor. On the other hand, bad subcontractors shy away from any questions about their past body of work, often because they have little-to-no experience in the task asked of them. They also cannot provide specifics of their work. Make sure that they not only have industry experience, but that it is specific to the task at hand.
4. Working Off-Contract
Good subcontractors will always want everything in writing, and they will follow their contracts to the letter. Bad subcontractors often avoid putting things in writing, as it gives them the freedom to do whatever they want and allows them to dodge accountability. In every business transaction, make sure that the contracts are detailed, signed, and followed closely.
5. Unconventional Payment Plans
Watch out for anyone who demands money in unusual manners, such as large payments upfront, or payments for partially completing a task rather than doing it to full completion. These are a signs of disorganization, budgetary instability (which can collapse a whole project) and inexperience.
6. Cheap Quality
While it’s not necessarily a bad thing to hire a subcontractor that offers a low price for their services, it’s important to pay close attention to how they operate to ensure that cheapness doesn’t trickle into performance. Does the sub also use cheap equipment? Do they purchase low-quality materials for a job? Are they content to complete a task below industry standards?
Good work leads to good referrals from past clients. Great subcontractors will gladly share the contact information of past clients because they know that client will have good things to say about them. The bad ones will conveniently “misplace” referrals, all of which would like have negative comments. Some simply do not have any referrals to offer, either due to a reputation for poor-quality or due to no experience.
In the end, the important thing is to judge a subcontractor by their actions rather than by their words. If all of their licenses, certifications, body of work and referrals are of high quality, then there will be nothing to worry about. However, if there is an inconsistency or shortcoming in any area, then approach with caution.