SUB-CONTRACTING PLAN

TABLE OF CONTENTS

1. INTRODUCTION...............................................................................................................................3
1.1. Purpose.........................................................................................................................................3
2. SCOPE OF SUBCONTRACT WORKS.............................................................................................3
2.1. Identification of Subcontract Works.............................................................................................3
2.2. Execution of Subcontract Agreement...........................................................................................3
2.3. Commencement of Subcontractor Works.....................................................................................3
2.4. Programme....................................................................................................................................4
3. SELECTION OF SUBCONTRACTORS............................................................................................4
3.1. Issue of Invitations to Price..........................................................................................................4
3.2. Choice of Proposed Subcontractor...............................................................................................4
4. SUPERVISION OF SUBCONTRACTORS.......................................................................................5
4.1. Sub-contractor’s Surveillance Audit.............................................................................................5
4.2. Subcontractor’s Meetings.............................................................................................................5
5. CONTROL OF SUBCONTRACTING...............................................................................................6
5.1. Subcontract Agreement Constraints.............................................................................................6
5.2. Performance of Sub-Let Works....................................................................................................6
5.3. Payment for Sub-Let Works.........................................................................................................6
6. MONITORING OF SUB-CONTRACTOR.........................................................................................6
6.1. Progress of the Subcontractor.......................................................................................................6
6.2. Quality of Subcontracted Works..................................................................................................7
6.3. Subcontractor Safety & Environmental........................................................................................7
6.4. Subcontractor Plant and Equipment.............................................................................................7
6.5. Review of Subcontractor’s Performance......................................................................................7
7. ATTENDANCE AND ACCESS.........................................................................................................7
7.1. Attendance Requirements.............................................................................................................7
7.2. Access Requirements....................................................................................................................8
8. MANAGEMENT REVIEW AND IMPROVEMENT........................................................................8
8.1. Management Review and follow-up action on matters arising....................................................8
1. INTRODUCTION
1.1. Purpose
The purpose of this Subcontract Plan is to outline the manner to be employed in the
selection of subcontractors to ensure that only those subcontractors that have the
capability to complete the works assigned to them in accordance with the
requirements of both the Client and SAPAC.

This plan also sets the mechanism for monitoring, supervision, management, and
control adopted to ensure that all subcontractors meet the required quality standards.

2. SCOPE OF SUBCONTRACT WORKS

2.1. Identification of Subcontract Works
SAPAC has appointed a Project Manager who is responsible for the overall management of
this project. The Project Controls Manager and his Contracts staff, under the leadership of
the Project Manager and the SAPAC corporate structure, will be responsible for the
execution of the Subcontract Plan. The identification of the portions of the work to be
subcontracted will be the responsibility of the Project Manager and SAPAC Corporate staff.
Approval from the Client will be required prior to entering into an agreement with the
proposed subcontractor and preference will be given to those pre-qualified by the Client.
Please refer to the specific provisions of the contract concerning subcontracting of the work.

2.2. Execution of Subcontract Agreement

After the subcontract agreement is drafted, it will be reviewed by the PM prior to
discussions with the subcontractor. A meeting will then be held with the
subcontractor to review the drafted document and obtain his acceptance of its
contents.

2.3. Commencement of Subcontractor Works

Prior to the sub-contractor commencing works on site a “kick off” meeting will be
held amongst the project team to pass on details of the agreement to the site staff
who will be working with the subcontractor on a day-to-day basis. This meeting will
typically identify the team members responsible for the control of the subcontractor,
availability of areas for offices, workshops, etc., access requirements and the
attendances to be provided. Any problems with the details of the agreement and what
can actually be provided by the subcontractor should be identified for discussion in
subsequent meetings with the subcontractor’s senior management.
 2.4. Programme
The terms and conditions of the subcontract will state that the subcontractor is bound
by and shall follow the Contractor’s Working Programmes. Details of these
programmes will have been given to the subcontractor in the discussions leading up
to the award of the subcontract and the subcontractor’s specific programme
requirements will have been identified. The concluded subcontract document should
therefore include a brief summary of these discussions.
Having commenced work, regular meetings (frequency will be determined by the
PM) will be held with the subcontractor to review progress and programme. Based
on the discussions held in these meetings, revised programmes will be issued and the
following programmes established and regularly updated:
 3-week rolling programme
 3-month rolling programme
 Subcontract programme to completion
A record will be made of the reasons for any changes to these programmes on a
week-by-week basis and details circulated to the project team. Records will also be
made of the affect of the changes in the subcontractor’s working programmes or
other programmed works. These may subsequently be used to form the basis of any
claims and entitlements or contra charges.

3. SELECTION OF SUBCONTRACTORS
3.1. Issue of Invitations to Price
The following steps will be taken to decide which subcontractors to obtain
quotations from:
 The Client's list of approved subcontractors will be accessed, if available to
obtain a list of subcontractors that carry out the work detailed in a proposed
subcontract scope.
 A check will be carried out to ensure that the subcontractor’s qualifications meet
the requirements set out in the Main Contract documents.
 Enquiries will not be sent to subcontractors who have not performed
satisfactorily on previous projects (safety, quality, environmental, contractual,
programme etc.)
 A new sub-contractor will be considered subject to satisfactory references.
 Enquiries will be sent to at least three subcontractors.

3.2. Choice of Proposed Subcontractor

The following steps will be followed in the selection of a subcontractor:
 A financial comparison will be made of all the subcontract quotations received
and of the budgeted allowances for the subcontract works.
  Where necessary adjustments to the financial comparison will be made for
qualifications and omitted items.
 Clarifications will be sought from the subcontractor for any exceptionally high or
low rates that have a significant bearing on the price quoted.
 A final financial comparison will then be drawn up for discussion by the project
team.
 A technical review will be carried out on any submissions (method statements,
procedures, programmes, quality, safety, environment, etc.) made by the
subcontractors to ensure they comply with the Main Contract and Project
Requirements.
 The technical review and financial comparison will be discussed by the project
team.
 The project team will then select at least two potential subcontractors for
interview.
 Interviews will involve the Project Manager and Commercial Manager.
 The interview will cover all aspects of the works that the subcontractor is
required to carry out and the methods and resources that the subcontractor
proposes to use. It will also cover financial and commercial aspects.
 Upon completion of the interviews and after checking out job references, the PM
will make a recommendation to the Client in respect of the award of the
subcontract.
 Upon receiving Client’s approval the PM will instruct the Commercial Manager
to award the subcontract on the agreed terms and conditions.

4. SUPERVISION OF SUBCONTRACTORS
The Project Manager and his staff will be responsible for overseeing the work of the
subcontractor to ensure it complies with quality and safety programmes.

4.1. Sub-contractor’s Surveillance Audit

Where required under the contract, the PM will determine a schedule of audit and/or
surveillance to be conducted to all subcontractors at appropriate stages. A qualified
internal auditor will be arranged to conduct such audit/surveillance at appropriate
time intervals which will be agreed by the subcontractors. Corrective and preventive
actions are prepared and followed up.

4.2. Subcontractor’s Meetings

A regular meeting with the subcontractor shall be held to provide a forum for the
review of the project progress and the resolution of issues in programme, progress,
design (if any), safety issues, quality matters, etc. The PM shall identify and
determine the frequency of meetings to be conducted throughout the project. Copy
of all correspondence, minutes of meeting, etc. shall be filed and maintained.
5. CONTROL OF SUBCONTRACTING
5.1. Subcontract Agreement Constraints
The standard subcontract agreement will contain clauses that prohibit the
subcontractor from sub-letting parts of its scope to others. This matter will be raised
during the negotiations with the sub-contractor and at the “kick-off” meeting. Any
elements that the sub-contractor proposes to sublet will not be accepted.

5.2. Performance of Sub-Let Works

Once approval has been given, the performance of the subcontractor will be
monitored closely by the site team. Also the subcontractor will be made to follow all
of the site procedures. Failure by the subcontractor to perform in accordance with the
agreed works programme, quality, safety and environmental performance will
immediately be brought to the attention of the PM and the Commercial Manager
who will decide on an appropriate course of action.

5.3. Payment for Sub-Let Works

Payment for sub-let works will be made strictly in accordance with the terms and
conditions of the subcontract. The Commercial Manager will prepare and issue
subcontract payment certificates. These certificates will incorporate an up-to-date
schedule of contra charges, details of which should have been discussed with the
subcontractor before the certificate is raised. The subcontract payment certificates
will be approved by the PM before the payment is processed. Subcontract payment
will be processed on a monthly basis.

6. MONITORING OF SUB-CONTRACTOR
6.1. Progress of the Subcontractor
The progress of works undertaken by each subcontractor is to be closely monitored
by the site team and weekly meetings will be held with each subcontractor to discuss
progress and programme.
Progress shall be monitored against the following programmes:
 Three week rolling programme
 Three month rolling programme
 Current working programme
Any significant deviations in subcontract progress will be immediately reported
(together with reasons for the deviations) to the PM, who will decide on an
appropriate course of action in conjunction with the Commercial Manager.
 6.2. Quality of Subcontracted Works
The quality of the works will be inherently recorded by site inspections. Should non-
conformances become apparent the subcontractor will be required to propose
remedial measures for approval prior to making good.
If the intensity of non-conformances is considered to be too frequent the
subcontractor will be required to provide improved supervision of the works until the
daily quality is deemed to be of a standard compliant with the Specification and the
Contractor’s quality system.

6.3. Subcontractor Safety & Environmental

The subcontractor will be required to comply at a minimum with all the
requirements of the Client Site Safety Plan and Site Environmental Plan. The
subcontractor will also be encouraged and aided by the relevant Construction
Managers to produce his own safety and environmental operating procedures
specific to the activities being performed.

6.4. Subcontractor Plant and Equipment

All plant and equipment supplied by the subcontractor will be required to be in good
working order and compliant with all contemporary safety requirements. The
equipment will be regularly inspected by the site foremen and any unsatisfactory
items will be reported to the relevant Construction Manager who will instruct the
subcontractor to replace/repair such item to a satisfactory condition.

6.5. Review of Subcontractor’s Performance

The subcontractor will be required to achieve the required performance of progress,
quality, safety and environmental. This subcontractor’s performance will be
reviewed by the PM on a weekly basis. If the subcontractor fails to achieve the
required performance, they will be requested to propose an action plan to improve
performance. If no improvement is shown within a reasonable time, the PM will
issue a warning letter. If after the issue of warning letter still no improvement, the
PM will recommend to determine the subcontract work.

7. ATTENDANCE AND ACCESS

7.1. Attendance Requirements
The attendance requirements for each subcontractor will be detailed in the
subcontract agreement. These details will be circulated to the site team at the “kick-
off” meeting. If a subcontractor requests further attendances the PM and the
Commercial Manager will immediately be advised and a decision made and
communicated to the site team.
 7.2. Access Requirements
Details of the access requirements for a subcontractor will be discussed and agreed
during the negotiations leading up to the award of the subcontract. They will also be
identified during the “kick-off” meeting with the subcontractor. If the subcontractor
request further access requirements the PM and the Commercial Manager will
immediately be advised and a decision made and communicated to the site team and
the subcontractor.

8. MANAGEMENT REVIEW AND IMPROVEMENT

8.1. Management Review and follow-up action on matters arising
Review of the subcontractor’s works will be carried out on an on-going basis
through the review of progress on site by the project team and regular meetings with
the relevant subcontractors as required by the project manager, senior management
and supervision staff at which the overall effectiveness of sub-contractor’s works
with regards to progress, quality, safety and environmental shall be reviewed.