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Subcontractor (SC)
What is a Subcontractor (SC)?
A subcontractor, also known as a trade contractor, is a specialized construction professional that a general contractor (GC), construction management property, owner, developer, or other entity hires to perform specific work on a construction project. Subcontractors typically specialize in a particular trade or craft, such as electrical work, plumbing, HVAC installation, framing, roofing, glazing, flooring, or drywall installation. They are bound by a contract that outlines the tasks they need to perform as well as deadlines and terms of payment.
Subcontractors are distinguished from GCs in several ways. GCs oversee the entire construction project, managing all aspects from start to finish, including coordinating subcontractors, obtaining permits, and ensuring compliance with building codes and regulations. Subcontractors, on the other hand, focus solely on their specialized area of work and are responsible for completing their specific tasks according to the project's plans and specifications.
Subcontractors face extensive payment cycles, as they cover all labor and material costs upfront for a project yet receive payment last. Progress billing further complicates the matter, mandating that GCs only reimburse subcontractors based on project completion percentage. This system requires subcontractors to invoice GCs every month for the work completed, which exposes them to various factors that can delay progress billing further. These include:
- using the wrong pay application form,
- missing documentation,
- lien waiver oversights,
- submitting pay apps through the wrong GC portal,
- general project delays and disputes, or
- the GC’s own cash flow issues.
As a result, most subcontractors wait about 90 days to get paid for the work they’ve already done, which can strain their cash flow and hamper their ability to take on new projects or pay their employees and suppliers.
This is where Siteline comes in. Siteline is a construction billing solution built specifically to streamline the subcontractor A/R workflow. With Siteline, trade contractors can easily generate and submit detailed pay apps tailored precisely to each GC's requirements. The platform also:
- tracks all compliance requirements and stores pertinent documents;
- tracks, collects, and submits lien waivers for the sub and their lower tiers;
- ensures approved change orders are incorporated into the schedule of values;
- provides full visibility into billing statuses across projects—including which GCs pay fastest to better anticipate cash flow; and
- creates accurate billing projections to monitor progress and effectively manage backlog.
By eliminating manual spreadsheets and centralizing all billing data, Siteline helps trade contractors accelerate their payment cycle by an average of three weeks. Discover how Siteline can get your subcontracting business paid faster by scheduling a demo today.
Trusted by trade contractors across the country
Other construction terms
What are Back Charges?
Back Charges are bills sent to subcontractors or vendors for unforeseen work that a general contractor or project manager had to complete on their behalf within the construction industry. This generally occurs when the subcontractor or vendor fails to complete their work scope to the specified standards, misses deadlines, or omits parts of their contracted responsibilities, and someone else must step in to rectify the issue. Therefore, the party who had to complete or redo the work sends 'back charges' to the original contractor, expecting reimbursement for labor, services, materials, or other costs involved in the completion of the task. They serve as a form of financial protection for the companies against contractual breaches in the construction projects.
What is a Request for Information (RFI)?
A Request for Information (RFI) in the construction industry is a formal process through which a party involved in a construction project request details about a document or a process. It acts as a vital communication tool between multiple project parties such as the general contractor, subcontractor, and the design team. This is generally used to resolve information gaps, make decisions or track project changes. The main purpose of an RFI in construction is to eliminate any ambiguity, introduce a control mechanism, avoid unrealistic project expectations and ensure that all participants have a clear understanding of the project. It assists in minimizing project risks and avoids potential disputes related to design issues, cost overruns or schedule delays. It's an essential element in maintaining transparency, effective communication and collaboration within a construction project.
What are Bid Prices?
Bid prices in the construction industry refer to the amount a contractor proposes to charge for a particular project or service tendered by a client or project owner. These prices are usually determined after the contractor carefully assesses the project's scope, requirements, and the associated material, equipment, labor expenses, and overheads. The bid prices are essentially the predicted cost of the project plus the profit margin of the contractor. The client or project owner usually picks the contractor with the most comprehensive and competitively priced bid, assuming all other important factors like experience and capability are deemed satisfactory. It's noteworthy that bid prices can be subject to negotiation, and post-bid changes could occur following project change orders or unexpected construction conditions.
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