Many growing IT companies find that working with subcontractors a great way to keep clients happy and overhead in check. Without having to bring on a full-time employee, IT companies can hire independent contractors on a per-project basis, extending their company’s scope and geographical reach, while giving clients part- or full-time support for a defined period of time.
But working with subcontractors isn’t without its hazards. Remember the old saying, “If you want the job done right, do it yourself”? The good news is, you can avoid many pitfalls by putting your expectations in writing, with both a detailed subcontract management plan and a legally binding 1099 independent contractor agreement signed by both you and your contractor.
Develop a Comprehensive Subcontract Management Plan
According to project management expert Karl Wiegers, a comprehensive plan for working with your freelance subcontractors should include as much information as possible about the project your subcontractor will be working on, from who will be involved to how conflicts and change requests will be resolved. For Karl Wiegers’ Subcontract Management Plan Template that you can use with your own projects, see the free downloads at the end of this article.
Wiegers suggests that you start with a brief overview of the project you’re outsourcing, including any issues or concerns that may require particular attention by your subcontractor. Next, clearly outline the human resources aspects of the project, including who will be involved, what their roles will be, who will serve as the principal points of contact, who will be the major decision-makers, and what processes those individuals will use in making decisions related to the project.
It’s also important to clarify in writing how you expect communications to be handled with the independent contractor. For example:
- Will you work primarily by phone, e-mail, videoconference, or face-to-face?
- How often, and in what level of detail, do you want to be updated on the project?
- Will you have scheduled technical peer reviews or management status meetings?
- If these communications will take place long-distance, how much will they cost?
Your subcontract management plan could also include a detailed strategy for project tracking and oversight. For example, you may want to consider:
- How often do you want to receive written status reports from the subcontractor?
- What should these reports contain?
- How often should your subcontractor provide updates to your client company, and in what form?
- What are the metrics by which the project will be measured (time, size, cost, defects, status)?
- Who will be responsible for managing risks, and how will risks be managed?
- How will commitments and issues be tracked and resolved?
- How often and when will periodic senior management reviews take place?
Another important consideration is to have a strategy in place should the project requirements change. For example, you may need to document a plan for submission and evaluation of requested changes during the project, as well as a process and team to make decisions about them.
Finally, you may wish to plan ahead for the final stages of the project by defining how a project will be considered completed, and establishing a transition plan for supporting the delivered product over the long-term. This part of the plan might also include a section on requirements tracing, so that you can ensure that every functional requirement is actually addressed by the final solution.
It’s also critical to have a signed subcontractor agreement in place with any independent contractor you bring onto a project. Such contracts prevent the independent contractor from taking a job with your client, protect your company’s intellectual property, clearly define your subcontractor’s responsibilities, and include other provisions that can help to ensure a healthy ongoing relationship with your subcontractor.
To avoid costly legal fees, many smaller IT companies purchase standard 1099 independent contractor agreement form templates that can be used unlimited times for a single price. Then, they may pay for a lawyer or law student to review the completed contract, just to be sure all bases are covered.
The more information you can provide in writing up-front, the less confusion there will be as your subcontractor works to implement the project. Creating a clear subcontract management plan and agreement ultimately helps to ensure a smoother implementation, a stronger independent contractor relationship, and a happier client.
Free downloads and other resources:
Subcontract Management Plan Template
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Brenna Lemieux - check her out at Google+ or Twitter