Subcontracting

Business Guide | June 2018

A “subcontractor” refers to a supplier of goods, works, plant, and/or related services that has entered into a contractual arrangement to perform a portion of a contract for which the entity has been contracted.

This guidance note explains ADB’s requirements on the treatment of subcontractors by borrowers for the procurement and implementation of goods, works, and plant. Subcontractors can contribute specialized skills and equipment not available to main contractors and can supplement their resources. The contractor is responsible for the performance of its subcontractors, but their underperformance can adversely impact contract performance and contract outcomes—specifically on schedule, quality, and cost. It can also pose reputational and integrity-related risks to the supply chain. The note highlights actions that borrowers can take to ensure that subcontractors are suitably qualified and follow the same contractual terms as the contractor on issues of performance and integrity.

Video: What is Subcontracting?

Contents 

  • Types of Subcontractors
  • Risks of Subcontracting
  • Mitigating Risks of Subcontracting
  • ADB Requirements on Subcontractors