Subcontractor
A company hired by the general contractor, not the owner directly, to perform a specific portion of the work, such as electrical, plumbing, or drywall, under a subcontract that flows down many of the same terms the GC agreed to in the [[concept-prime-contract|prime contract]].
Why it matters
Most of the actual physical work on a project gets performed by subcontractors, not the GC's own employees; the GC's real job is coordinating and holding them accountable, which only works if the subcontract properly passes down the obligations the GC itself owes the owner.
On a real project
A general contractor holds one prime contract with the owner, then signs separate subcontracts with an electrical subcontractor, a plumbing subcontractor, and a drywall subcontractor to actually perform each piece of the work.
Who this matters most to
A Project Manager manages subcontractor relationships and payments day to day. A Contracts Administrator drafts the subcontract agreement itself, making sure it properly flows down the prime contract's key terms.
Where this goes wrong
A general contractor signs a subcontract that never actually references or incorporates the terms of the prime contract. When a dispute arises over a schedule delay, the subcontractor argues they're not bound by the prime contract's liquidated damages clause at all, since their own subcontract never mentioned it.