The NEC subcontractor definition is narrower than everyday usage. A Subcontractor is someone with a contract with the Contractor to do certain kinds of work on the job. Not everyone the Contractor pays qualifies: most suppliers don't, and whether plant hire or agency labour does can depend on the edition.
This matters because the classification affects who has to be accepted, how costs are recovered and who counts as Others. The NEC3 ECC definition is at 11.2(17). For NEC4, this page follows the equivalent definition in the NEC4 subcontract, where the term is Subsubcontractor, so check the wording in your own NEC4 ECC. This page is part of the NEC definitions glossary.
What the two editions look at
| NEC3 ECC | NEC4 (from the subcontract wording) | |
|---|---|---|
| Build or install part of the works | Yes | Yes |
| Design | Not in itself, unless it amounts to a service necessary to Provide the Works | Yes: design of all or part of the works, except a supplier's design of its own Plant and Materials |
| Services | A service necessary to Provide the Works | A service in the Working Areas necessary to Provide the Works |
| Bespoke supply | Yes, where the supplier designs the Plant and Materials, in whole or part, specifically for this job | Not by that route |
| Exclusions | None stated in that list | Hire of Equipment; people paid for according to the time they work |
Test cases
| Company | NEC3 | NEC4 (subcontract wording) |
|---|---|---|
| Groundworks firm doing part of the works | Subcontractor | Subcontractor |
| Readymix supplier delivering standard concrete | Not a Subcontractor | Not a Subcontractor |
| Manufacturer designing a bespoke switchboard, then supplying it | Subcontractor | Not by that route |
| Design consultant engaged by the Contractor | Likely, as a service | Subcontractor |
| Hired excavator with no operator | Depends on the service | Excluded |
| Labour agency paid by the hour | Depends on the service | Excluded |
Read both columns as a guide for thinking, not a final answer. The facts matter, as does any Z clause.
Where it matters
- Acceptance. Each proposed Subcontractor's name goes to the Project Manager for acceptance, along with the proposed subcontract conditions unless they're an NEC form or have already been accepted (clause 26). Appointing without that is a breach, and it can have cost effects on Options C, D and E.
- Responsibility. The Contractor stays responsible for the work as if it hadn't subcontracted (26.1).
- Payment. On cost-based Options, amounts paid to Subcontractors feed Defined Cost by a different route from the Contractor's own costs. See subcontractor costs.
- Fee. In NEC3, the subcontracted fee percentage applies to the Defined Cost of subcontracted work, so a wrong label changes the money.
- Others. A Subcontractor can't be one of Others, so its delays don't give rise to a 60.1(5) event.
A worked example
A fictional NEC3 Option C job, with illustrative rates. A steel firm is engaged to design and fabricate a bespoke staircase, then install it. Direct fee is 12%, and subcontracted fee 4%.
The firm clearly installs part of the works, so it's a Subcontractor. The Contractor should have submitted its name and conditions. Its £200,000 cost is at the subcontracted rate, which gives £8,000 of Fee. Had the Contractor recorded it as a supplier, the direct rate could have produced £24,000, an overclaim of £16,000 that an audit would be likely to catch. The label has real consequences.
What people get wrong
- Using "subcontractor" for all supply chain firms. In correspondence, use the defined term only when it applies.
- Thinking it reaches every tier. The definition covers those with a contract with the Contractor. Lower tiers aren't Subcontractors under the main contract, and they don't get a direct route to the Client.
- Forgetting the NEC4 wording moved the test. A firm treated as a Subcontractor on an NEC3 job may not be one on the next NEC4 job.
- Assuming back-to-back terms apply themselves. The subcontract needs its own terms. The guide to managing subcontracts covers how to keep these in step.
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