Subcontracting on public contracts: the side door into public work

Not every public dollar goes straight to the firm that bid. Facility management companies, general contractors and larger service firms win bundled contracts and then hire specialists for the parts they don't do themselves: the window cleaning in a janitorial contract, the irrigation repairs in a parks contract, the roof patching in a building maintenance contract. That's a way in for a small crew that isn't ready to bid on its own.

Why subcontract instead of bidding?

• Smaller requirements. The prime handles the bid, the bonding and the buyer relationship. You meet the prime's requirements, which are usually simpler.
• Public-sector references. "We've done the gutter work on School District 68's buildings for two years" is a reference you can use when you bid directly.
• Less paperwork per dollar. No proposal writing, no tender to watch.

The trade-off is margin and control: the prime takes a cut, sets the schedule and owns the client.

How do I find primes to work for?

• Look at who wins. Award notices and contract histories on BC Bid, CanadaBuys and buyer websites tell you which firms hold contracts near you. CrewBid shows who has held similar work where we know it.
• Watch for large bundled tenders in your area. When a facility maintenance or multi-site contract is posted, the firms likely to bid will need subcontractors, and sometimes need named subcontractors in the bid itself.
• Check plan-taker lists. Some portals show who has downloaded a tender. Those are your potential primes.
• Introduce yourself early. Primes line up subcontractors before they price a bid, not after they win. A short email with your trade, area, crew size, WorkSafeBC account number, insurance limits and two references is enough.

What will a prime ask for?

Expect most of what a public buyer would ask, because the prime has to pass it on:

• WorkSafeBC registration and a clearance letter. The prime can be liable for your unpaid premiums, so they'll check before you start and often before they pay you.
• Liability insurance, often at the same limit the buyer requires, with the prime and the buyer as additional insureds.
• Your safety program and site orientation. The prime is often the prime contractor for safety, and you'll work under its system.
• Pricing that fits theirs, usually in the units the buyer is paying.

What should I check before I sign?

Read the subcontract, not just the price:

• Pay-when-paid terms. When do you get paid, and does it depend on the buyer paying the prime first?
• Holdbacks. On construction and improvement work, BC's Builders Lien Act requires a 10 percent holdback, and the prime will hold it back from you too.
• Flow-down terms. Clauses that pass the buyer's contract terms down to you. Ask to see the parts that apply.
• Scope and change orders. How extra work is approved and priced.
• Termination. If the prime loses the contract, what happens to yours?

Can I team up with other small firms instead?

Sometimes. Two or three small firms can bid together, with one as prime and the others as named subcontractors, to cover a bundled scope none could cover alone. The prime still carries the contract risk, so agree the split, the responsibilities and what happens if someone drops out, in writing, before you bid.

Where to go next

When you're ready to bid directly, start with should you bid? and how to win government contracts in BC.