What does subcontracting mean in procurement

Subcontracting is the division of a large project into several parts, each of which is called a package. Sometimes the project is divided into packages at the time of bidding, or sometimes a supplier takes the whole project and then splits it up and legally subcontracts it.

In layman's terms, this means that the work is split up and subdivided among different people.

There are two types of legal subcontracting, professional subcontracting and labor subcontracting.

Professional subcontracting refers to some highly specialized parts, such as water supply and drainage, electrical, ventilation, steel structure, etc., the general contractor does not want to do, it can be subcontracted to qualified subcontracting units to do. In the past, there are often the project as a whole, "subcontracting" to the same boss to find a different company, but dismemberment of the contract in the Ministry of Construction No. 118 is defined as subcontracting, and therefore is now used less.

Labor subcontracting refers to the construction of their own general contractor, material procurement and management personnel are their own, but the workers are called by the labor company and pay wages, the general contractor and the labor company to sign a contract, the labor company and workers to sign a contract.