Back-to-Back Relationship under Standard Subcontract Agreements: Comparative Study

Abstract

The interactions between the different parties in construction projects are dictated by the contractual terms governing their relationship. The largest portion of construction work is undertaken by subcontractors who execute on average 70%–90% of the work. Thus, the contractual relationship between general contractors and their subcontractors is of paramount importance. The contractual relationship between contractors and subcontractors is referred to as back-to-back or risk shifting when obligations and responsibilities are passed from the contractor to the subcontractor. Most previous research efforts focused on the development of frameworks that aid main contractors in the selection of the most optimal subcontractor(s) as well as help general contractors work with their subcontractors and manage their subcontracts. This paper provides a comparative study that is focused on the back-to-back relationship between main contractors and subcontractors under the standard design-build forms of contract. As such, a multistep methodology was utilized. First, the authors analyzed and compared the back-to-back provisions as stipulated by three standard design-build forms of contracts in the US. Second, the authors incorporated law cases to have practical perspectives on the main causes of disputes on each aspect of the back-to-back relationship between general contractors and their subcontractors. Third, the authors highlighted the implied advantages and disadvantages of each of the contracts under investigation from the perspective of the project’s best interest. Fourth, the authors developed a checklist and set of suggested practices that enable contract administrators to handle their projects more effectively and efficiently. The outcomes of this research study will promote effective management of the back-to-back relationship between design-builders and their subcontractors in design-build construction projects. In addition, it is perceived that the recommendations resulting from this study could fill contractual gaps in the existing standard subcontract agreements.

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