From the course: Construction Management: Managing Risk

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Managing subcontractors and suppliers

Managing subcontractors and suppliers

From the course: Construction Management: Managing Risk

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Managing subcontractors and suppliers

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- Part of the reason that we hire trade contractors is to transfer risk to a more capable party. Now, sure, I could self-perform all the electrical work, for example, in a building project, and if I did it really well, I could save money, because I would get to keep the markup being added by an electrical subcontractor. However, think about the risk involved and the things that could go wrong. I would have to hire a supervisor that knew the work and skilled labor to perform the work. But what happens if I can't find these people? And how much risk is there in bringing on a new supervisor and hoping that they can manage the work efficiently? Also, this is a typical construction project, which means that there are going to be periods of time where there is no work for these electricians. Since I don't have anywhere else for them to go, will they quit? Will they be available when I need them again, or will I have to go hire new ones all over again? That's just too many unknowns, with the…

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