Subcontractor Management in Tenders

Nov 26, 2021Bid Management, SME Champions, Social Value, Tender Process

Subcontractor management is becoming an increasing part of winning tender responses. Buyers want to know that the people working on their projects will be legally compliant, high quality, financially stable and well looked after.

To prove this, you will need to have a well-defined procurement process of your own that you can use to reassure buyers that you know you will get what is promised from your subbies. Based on our experience of submitting tenders in multiple industries and ranging in value from tens of thousands to tens of millions, here’s what you should be considering.

Recruiting Subcontractors

It’s important to consider geography when you look at suppliers and subcontractors, as local spend often forms part of your Social Value offer for the tender. If you bid for contracts in the same geographical area this is a relatively simple task; if you work in a wider area or across the country, then you may find yourself recruiting local subcontractors for each project.

A useful way of doing this is to host a ‘Meet the Buyer’ event and invite local Micro, Small, and Medium Enterprises (MSMEs) and Voluntary, Community, and Social Enterprise (VCSE) organisations to talk to you about becoming part of your supply chain. Invitations can go out via the local Chamber of Commerce, the Federation of Small Business, and through Local Enterprise Partnerships.

Vetting Subcontractors

Subcontractor Management begins with recruiting the right people to your supply chain. Remember, your company’s name is on the contract and your reputation is on the line if they don’t deliver or are found to be in breach of any legislation.

Your subcontractor vetting process should include:

  • A credit check
  • Confirmation that they comply with Modern Slavery legislation
  • Confirmation that they comply with Environmental legislation
  • Confirmation that they comply with H&S legislation
  • Details of any non-compliance, notices, or incidents related to the legislation listed above
  • Their Quality Assurance process
  • What insurances do they hold?
  • Any qualifications or certifications they hold
  • References

But subcontractor management is about more than simply ensuring that the bare minimum standards are met. You should also consider asking them:

  • Do they have an Environmental Policy?
  • Do they have a Net Zero plan?
  • Do they have an Equality, Diversity, and Inclusion policy?
  • Do they monitor their own hiring for diversity?
  • Do they pay a living wage?
  • Do they measure their gender pay gap?
  • Will they support you in your delivery of social value through donations of time/materials?

Subcontractor Management – on the Contract

Subcontractor ManagementYou should carry out financial checks for your subcontractor on a contract-by-contract basis, ensuring that they are financially stable to take on this work and that their work with you is not over 50% of their total turnover – just as the buyer will ensure with you as part of their financial checks.

We advise our clients to ensure that their subcontractors will work to the same standards as the company itself. This is a simple way to make sure that everyone understands what is expected of them, and what they can expect of others. However, these standards can vary depending on the project, if the buyer has a particular standard in mind, for example for their customer service standard or environmental policy.  Regardless, it is good subcontractor management to have a project-specific induction for all staff and subcontractors working on the contract to ensure that expectations are clearly set.

You should also ensure that you have set clear KPIs for performance with your subcontractors and make them clear on what your process will be for measuring and monitoring – and what your expectations are for remediation.

Supporting your Subcontractors

Support for a local supply chain is another factor that is evaluated in tenders, often as part of the social value aspect of the tender. Larger companies are expected to help smaller companies to grow and improve, and larger companies often get involved in initiatives such as the Supply Chain Sustainability School to support this.

Another way to support your subcontractors is to allow them to take part in your training and staff wellbeing programs. Not only will this increase the quality of the service they can provide for you, but it will contribute towards your social value offer.

Prompt payment of suppliers is another area that has recently become a focus of larger tenders via PPN 08/21, but we often see measures intended for larger tenders adopted as best practice by some buyers. With public sector organisations bound by the prompt payment code, you subcontractor management should include the same terms.

Losing Points on Subcontractor Management?

Let us help! Our extensive experience in submitting tenders for clients across a range of industries and values allows us to bring you the latest advice and guidance for managing your subbies. If you need some help with a tender or just putting together your own subcontractor management process, get in touch today.

Adrian Corcoran

Adrian Corcoran is Managing Director and Founder of Bid for Success. Passionate about working with great businesses to win them new work, she and the Bid for Success team are here to help you with your bidding and work winning needs.

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