32 CHAPTER FOUR
4–7 Specialty Contractors
Aspecialty contractororsubcontractoris a separate contrac-
tor hired by the prime contractor to perform certain por-
tions of the work. The amount of work that the prime
contractor will subcontract varies from project to project.
Some federal and state regulations limit the proportion of a
project that may be subcontracted, but this is rarely the case
in private work. There are advantages and disadvantages to
using specialty contractors. Trades such as plumbing, electri-
cal, and heating and air-conditioning have a tradition of
being performed by specialty contractors, due to their spe-
cialized nature and licensing requirements. However, spe-
cialty contractors can now be found who are capable of
performing every aspect of the construction project. Con-
tractors today can construct entire projects without having
any direct-hire craft personnel. The use of specialty contrac-
tors has gained popularity as a means to reduce risk and
overhead; however, the contractor gives up a substantial
amount of control when subcontracting the entire project.
If specialty contractors are to be used, the contractor
must be certain to notify them early in the bidding period so
that they have time to prepare a complete, accurate proposal.
If rushed, the specialty contractor tends to bid high just for
protection against what might have been missed.
The use of specialty contractors can be economical, but
estimates still must be done for each portion of work. Even if
the estimator intends to subcontract the work, an estimate of
the work should be prepared. It is possible that the estimator
will not receive proposals for a project before the bid date
and will have to use an estimated cost of the work in totaling
the proposal. All subcontractors’ proposals (Figure 4.3) are
compared with the estimator’s price; it is important that a
subcontractor’s price is neither too high nor too low. If
either situation exists, the estimator should call the subcon-
tractor and discuss the proposal with him.
The specialty contractor’s proposal is often phoned,
faxed, or e-mailed into the general contractor’s office at the
last minute because of the subcontractor’s fear that the con-
tractor will tell other subcontractors the proposal price and
encourage lower bids. This practice is commonly referred to
asbid peddlingorbid shoppingand is highly unethical and
should be discouraged. To prevent bid shopping, specialty
contractors submit their final price only minutes before the
bids close, which leads to confusion and makes it difficult for
the estimator to analyze all bids carefully. This confusion is
compounded by specialty contractors who submit unso-
licited bids. These bids come from specialty contractors who
were not contacted or invited to submit a bid, but who find
out which contractors are bidding the project and submit a
bid. Since these companies are not prequalified, there is an
element of risk associated with accepting one of these bids.
On the other hand, not using low bids from unsolicited sub-
contractors places the contractor at a price disadvantage.
In checking subcontractor proposals, note especially
what is included and what is left out. Each subsequent pro-
posal may add or delete items. Often the proposals set up
certain conditions, such as use of water, heat, or hoisting
facilities. The estimator must compare each proposal and
select the one that is the most economical.
All costs must be included somewhere. If the subcontrac-
tor does not include an item in the proposal, it must be con-
sidered elsewhere. A tricky task for the prime contractor is the
comparison of the individual subcontractor’s price quotes.
Throughout the estimating process, the prime contractorFIGURE 4.3.Subcontractor’s Proposal.