Subcontracting can be an important part of a computer consulting business.  So how do you manage your subcontractors and subcontracting relationships?

Controlling Subcontracting

There are many different types of subcontracting relationships and different ways to manage them.  You can use anything from a hands-off approach to a micro-managing approach.  Most companies choose a middle ground.  Certain industries need more oversight and control than others, but your best bet is to run the function in house for a short period of time to decide what needs to be done and how you are going to measure a successful relationship.

Managing Subcontracting Relationships

You need to be clear in outlining which party handles which details in order to properly manage subcontractors.  Before you outsource, you should figure out why you’re outsourcing.  Do you need additional capacity?  Are you lacking certain specialized skills?  Do you have short-term needs?  Do you want to save money?  Answer these questions to figure out how you will manage subcontracting relationships.

Subcontracting Agreements

You have to have your subcontracting agreements reviewed by a professional attorney.  If you are in the U.S. and hiring small companies to be involved in subcontracting relationships (individual consultants, etc.), you need to be absolutely sure the company is a legitimate independent contractors and not a statutory employee.  Check the IRS Web site for information about how to figure out subcontracting relationships.

Get advice from reliable counsel before you enter into any subcontracting situations.

Blogged By:  Joshua Feinberg