What is Subcontracting?
Definition of Subcontracting
Subcontracting is a process of contractual agreement with a third party to perform a certain amount of work. The third party is known as subcontractor.
The most common example of subcontracting can be seen in construction industry where builders subcontract the tasks like plumbing, electric work, wood work etc.
Explanation of Subcontracting
- Subcontracting offers several advantages.
- It is less expensive
- Gives more time to focus on major tasks
- Multiple tasks can be performed simultaneously
- However, there are some disadvantages as well.
- Loss of control over quality and on time completion of tasks
- Lack of effective communication between contractor and subcontractor