Construction - Managing a Labour-Only Subcontract

Labour-only requirement identified during job planning. Scope of work, programme dates, and rate (day rate or fixed-price labour-only) agreed. Sub-contractor's CIS registration status confirmed.

Written works order issued specifying scope, site address, start date, programme duration, agreed rate, confirmation that all materials are supplied by main contractor, and health and safety requirements.

Purchase orders raised against the job for all materials to be delivered to site. Delivery notes recorded on receipt to attribute material costs to the correct job from the start.

Sub-contractor daily attendance recorded on site. Any work outside agreed scope captured as a daywork instruction, approved by the site manager before the work proceeds.

Running labour cost tracked against the job record as the programme progresses. Site manager flagged if actual attendance days are exceeding the planned figure.

Sub-contractor invoice received and verified against the works order, recorded attendance, and approved daywork instructions. Queried immediately if discrepancies found. Approved and matched once confirmed.

Confirmed labour cost coded against the job record with CIS deduction applied. Labour cost included in job costing when raising the next stage invoice or payment application to the client.

Without a written works order, scope disputes arise over what was included in the labour price versus what should be charged as additional daywork - claims that can add up quickly over a multi-week programme.

Labour-only sub-contractors are typically paid weekly or fortnightly, but the main contractor may not invoice the client until a stage milestone is reached, creating a cash flow timing gap that needs to be planned for.

Tracking which materials were consumed by a labour-only sub on a specific job is difficult without purchase orders raised against the job, leading to inaccurate job costing and an unclear picture of actual gross margin.