What is subcontracting?

Subcontracting refers specifically to the practice of outsourcing work to another business or contractor. This means that a primary contractor hires an external party to handle part of the work that they have been contracted to complete. This is often done to leverage specialized skills, reduce costs, or manage workload more effectively. In procurement and supply management, subcontracting is a common strategy to enhance operational efficiency and allow companies to focus on their core competencies.

By utilizing subcontracting, businesses can tap into expertise and resources that they may not possess internally, which can ultimately lead to better project outcomes and a more flexible approach to fulfilling contractual obligations. Subcontractors become responsible for delivering specific parts of the work, allowing the primary contractor to manage and coordinate the overall project effectively.