Preferred sub-contractors / suppliers
The department policy
To minimise risk to the principal, the department recommends that all subcontracts, including mechanical and electrical that can often represent almost half of the projects budget, be tendered as a component of the main contract. Nominated sub-contracts are not recommended as they blur risks, liabilities and responsibilities and should be avoided wherever possible.
Consideration will not normally be given by the department for the inclusion of nominated or recommended sub-contractors / suppliers.
A recommendation can be made to the department utilising this method of subcontracting, but it must clearly demonstrate with documented reasons showing that the project will benefit greatly and that the proposal is supported by the principal / agency and superintendent. Exceptions will generally be considered only if:
- There is a clear indication that the equipment/trade being specified can only be supplied by the nominated companies.
- Site specific considerations such as integration of specialist works with safety / fire systems.
If approved by the department, the superintendent may propose to nominate particular sub-contractors or suppliers, where such work or products are recommended to be incorporated in the building. However, the government supply policy requirements must always be considered. This means that the selection and approval of subcontractors or suppliers should be made on a contestable basis, all parties are treated fairly and decisions be based on using assessment criteria such as fit for purpose and best value applicable to all submissions.
The contractor may call tenders or obtain quotations for subcontracts and supplies. Where existing service providers have sufficient expertise and capacity, they should be given the opportunity to tender for sub-contract work.
The superintendent makes recommendations to the steering committee / project control group (PCG) for endorsement of the recommended sub-contractor / supplier. The recommendation is normally based on the contractor's recommendation. This is because the contractor is ultimately responsible for work and materials or products of all the sub-contractors and / or suppliers.
There are options for engaging and appointing subcontractors / suppliers.
- A separate tender is invited and the successful tenderer is nominated to the builder for inclusion in the contract. In this instance, the firm is a nominated subcontractor to the contractor.
- A list of approved subcontractors / suppliers is included in the tender documents advising the builder that they are responsible for obtaining quotations from the approved or equivalent firms. In this instance the firm is selected by the builder.
The department has no objection to the engagement of selected sub-contractors / suppliers. Experience has shown that the use of selected sub-contractors / suppliers is less likely to lead to contractual disputes.