How to manage work of subcontractors properly?

In#nbsp;my#nbsp;early days as#nbsp;professional I#nbsp;was working in a#nbsp;IT consulting company and spend quite a#nbsp;lot of#nbsp;time with customers, project managers and consultants. This experience gave me#nbsp;a#nbsp;great understanding that the project terms must be#nbsp;agreed and signed off before the project starts.

I#nbsp;try as#nbsp;much as#nbsp;I#nbsp;can work exclusively with fixed contracts where a#nbsp;contractor commits on#nbsp;deliverables and delivery time, so#nbsp;they actually carry the whole risk on#nbsp;the contract in#nbsp;terms of#nbsp;money paid, but if#nbsp;your project is#nbsp;complex and there are a#nbsp;few contractors or#nbsp;one with major responsibility, you need to#nbsp;manage them closely because if#nbsp;they fail, your project will stress a#nbsp;time slip which can be#nbsp;hardly damaging for the whole success.

From a#nbsp;project-management perspective, some types of#nbsp;contracts are better than others. I#nbsp;will not review the ones which are not good, they are widely available and ultra-loved by#nbsp;a#nbsp;contractors. There is#nbsp;only one type of#nbsp;the contract which give you a#nbsp;better control over the quality, time and cost#nbsp;— one of#nbsp;them is#nbsp;a#nbsp;fixed contract where you have deliverables described by#nbsp;what, when and with quality metrics described by#nbsp;requirements. It#nbsp;might be#nbsp;based on#nbsp;a#nbsp;cost per stage without looking into sub-contractor cost as#nbsp;well as#nbsp;cost-plus contract, such as#nbsp;cost-plus-fixed-fee and cost-plus-incentive-fee.

The way these contracts work is#nbsp;that a#nbsp;contractor is#nbsp;paid for the work done, it#nbsp;might be#nbsp;a#nbsp;fixed fee without entering into details of#nbsp;their direct and indirect costs#nbsp;— like estimating all the expenses and negotiating an#nbsp;additional payment to#nbsp;allow for a#nbsp;profit. The contractor’s fee can fluctuate depending on#nbsp;the results of#nbsp;their work and hitting targets faster can lead acash bonus. Be#nbsp;careful with this as#nbsp;it#nbsp;might make subcontractor to#nbsp;over estimate stages in#nbsp;a#nbsp;run to#nbsp;get additional cash from you. I#nbsp;would suggest you complete negotiations and agree on#nbsp;the fixed terms and then introduce this bonus, ifyou feel it#nbsp;is#nbsp;necessary and give your project a#nbsp;priority in#nbsp;their scope of#nbsp;work. I#nbsp;mean there must be#nbsp;a#nbsp;concrete reason for introducing it.

In#nbsp;my#nbsp;company I#nbsp;work with lots of#nbsp;different partners and subcontractors, including having a#nbsp;deeply integrated, complex project where part of#nbsp;the tasks is#nbsp;done by#nbsp;our own team and part of#nbsp;the tasks is#nbsp;subcontracted. Sometimes I#nbsp;meet with "a tribes-situation" where people from one team start treating members of#nbsp;another team like they are not belonging to#nbsp;their cycle and this is#nbsp;very damaging. Lots of#nbsp;misunderstanding and uncontrolled conflicts taking its beginning from such thinking.