Construction Industry Development Board Act, 2000 (Act No. 38 of 2000)Board NoticesConstruction Procurement Best Practice6. Subcontracting Arrangements |
Subcontractors often have unequal negotiating power with prime contractors due to the sheer size of the parties and their dependency for future work. Traditionally, as employers only have a contractual relationship with the prime contractor, they regard subcontracting issues to be the prime contractor’s problem and of no concern to them. Subcontracting is, however, an effective means of involving small, medium and micro enterprises in the supply chain. In fact the construction industry is characterised by a wide range of specialist subcontractors, whose function is critical to project outcomes. It is in the interests of a healthy industry that the position of subcontractors should be strengthened by procurement best practice.
| ➢ | CIDB Construction Procurement Best Practice Guideline D1 (1012), Subcontracting Arrangements, describes desirable and appropriate subcontracting practices. It also identifies standard industry forms of subcontract which are framed around fair conditions of subcontract. |