SUBCONTRACTOR MANAGEMENT

Project Manager control of subcontractor selection, scope, coordination, performance and close-out

Yacht refit projects rely heavily on specialist subcontractors. These may include engineering companies, electricians, painters, welders, joiners, HVAC specialists, electronics technicians, riggers, survey companies, interior contractors and OEM service representatives.

The Project Manager’s role is to ensure that each subcontractor has a clearly defined scope, understands the programme and yacht requirements, has suitable access and information, and completes the work to the agreed technical, commercial and quality standard.

Poor subcontractor control can lead to duplicated work, gaps in scope, programme delay, uncontrolled variation, damage to completed work and disputes over cost or responsibility.

Key responsibilities

• Define the subcontractor scope before requesting quotations.
• Provide sufficient drawings, specifications and technical information.
• Identify interfaces with other contractors and yacht systems.
• Obtain competitive quotations where appropriate.
• Compare quotations on a like-for-like basis.
• Clarify exclusions, assumptions and provisional sums.
• Confirm labour rates, travel, accommodation and mobilisation costs where relevant.
• Agree payment terms and invoicing requirements.
• Confirm insurance and required qualifications.
• Verify specialist or manufacturer authorisations where applicable.
• Confirm required Class, Flag or approved-service-provider status where relevant.
• Issue a clear purchase order, work order or subcontract instruction.
• Establish programme dates and milestone requirements.
• Confirm access, permits, security and onboard working arrangements.
• Conduct a subcontractor kick-off meeting where appropriate.
• Define inspection and hold points.
• Monitor progress against the agreed scope and programme.
• Coordinate subcontractor interfaces.
• Record additional-work requests before work proceeds.
• Obtain quotations for variations and obtain authorised approval.
• Monitor quality and raise deficiencies or NCRs where required.
• Maintain records of labour, materials and completed work.
• Verify completion before approving invoices.
• Obtain test reports, certificates, manuals and warranties.
• Close outstanding defects before final payment where contractually appropriate.
• Record subcontractor performance for future projects.

PROJECT MANAGER COMPETENCY TEST

Scenario 1 — Incomplete Quotation

Three subcontractors quote for the same machinery package. One quotation is significantly cheaper, but it excludes removal, lifting, travel and commissioning.

Question:
What should the Project Manager do?

A. Select the cheapest quotation immediately
B. Normalise the quotations and compare the complete scope, exclusions and total expected cost
C. Divide the three prices by three
D. Ask the Captain to select the contractor

Correct answer: B

Why:
Quotation comparison must be based on equivalent scope. A low headline price may result in a higher final cost if important activities are excluded.

Scenario 2 — Additional Work

A subcontractor discovers additional work and starts immediately, saying that it is necessary to avoid delaying the project.

Question:
What should the Project Manager do?

A. Allow the work and discuss the cost afterwards
B. Record the additional scope, establish technical necessity, obtain a quotation and authorised approval before proceeding wherever practicable
C. Refuse all additional work
D. Ask the subcontractor to hide the cost in the original invoice

Correct answer: B

Why:
Uncontrolled additional work is a major source of budget disputes. Variations should be defined, priced and authorised through the project’s change-control process.

Scenario 3 — Interface Conflict

An electrical subcontractor needs access to an area where the joinery contractor has already started closing panels.

Question:
What should the Project Manager do?

A. Allow the joinery contractor to continue because they arrived first
B. Coordinate the interface and sequence the work so required electrical inspection and completion occur before access is closed
C. Ask both subcontractors to resolve it between themselves
D. Remove the electrical work from scope

Correct answer: B

Why:
The Project Manager must control interfaces between work packages. Poor sequencing can cause rework, damage and programme delay.

Scenario 4 — Invoice Approval

A subcontractor submits a final invoice, but commissioning records, test certificates and several punch-list items remain outstanding.

Question:
What should the Project Manager do?

A. Approve the invoice because physical work appears complete
B. Verify contractual completion requirements and resolve outstanding deliverables before final commercial close-out
C. Reject the subcontractor permanently
D. Ask the accounts department to decide whether the work is complete

Correct answer: B

Why:
Physical completion alone may not constitute contractual completion. Documentation, testing, defects and agreed deliverables form part of the work package and should be considered during invoice approval and close-out.

MODULE COMPLETION

Before completing this module, the Project Manager should be able to:

• define a clear subcontractor scope of work
• obtain and compare quotations on a like-for-like basis
• identify exclusions, assumptions and commercial risk
• understand subcontractor insurance and qualification requirements
• establish programme milestones and interface responsibilities
• coordinate access, permits and onboard working arrangements
• manage subcontractor progress and quality
• control additional work and variations
• verify progress before invoice approval
• manage defects and punch-list items
• collect test reports, certificates, manuals and warranties
• complete technical and commercial close-out
• maintain subcontractor performance records for future projects

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