Definition[]
A subcontractor is "[a] contractor who enters into a contract with a prime contractor."[1]
Overview[]
A subcontractor generally is hired by a prime contractor to perform a specific task as part of the overall project. While the most common concept of a subcontractor is in building works and civil engineering, the range of opportunities for subcontractor is much wider and it is possible that the greatest number now operate in the information technology and information sectors of business.
The incentive to hire subcontractors is either to reduce costs or to mitigate project risks. In this way the general contractor receives the same or better service than the general contractor could have provided by itself, at lower overall risk. Many subcontractors do work for the same companies rather than different ones. This allows subcontractors to further specialize their skills.
Contract clause[]
Use of subcontractor
| “ | language outlines any subcontractors that the vendor will use and that would have access to firm data. It also addresses the controls that the vendor would require at any subcontractor, for instance regarding employee data access or data encryption. Typically, controls expected to be present at the vendor would also be required at the subcontractor.[2] | ” |
References[]
- ↑ Defense Acquisition University, Glossary, at B-173 (13th ed. Nov. 2009) (full-text).
- ↑ Report on Cybersecurity Practices, at 28.
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