Contractor & Subcontractor Agreements
Purpose
Defines how Spartan manages subcontractor relationships — when subcontractors are used, how they are engaged, and the contractual and financial requirements that apply. ## Who This Applies To
Josh (owner) and the Production Concierge (purchasing and vendor coordination). ## When Spartan Uses Subcontractors
Spartan is primarily a self-performing plumbing company. Subcontractors are used when:
- Specialized work is required outside Spartan's license scope (e. g. , well drilling, electrical, roofing penetrations)
- Workload exceeds current capacity temporarily
- Specific certifications are required for a scope element (e. g. , backflow certification)
## Subcontractor Markup Guidelines
From Slack: when working with subcontractors (e. g. , for well drilling), a standard markup of 30% is generally sufficient to cover costs. For complex or high-margin jobs, the markup may be 50-80% depending on Spartan's contribution and risk. Josh approves final markup on subcontracted work. ## Commission Accounting for Subcontracted Work
Slack policy: When using subcontractors, ensure their costs are removed from commission payouts to employees. If a $5,000 job includes $2,000 in subcontractor costs, commissions are calculated on the net, not the gross. ## Permit Responsibility
Critical from Slack: When using a subcontractor who is responsible for pulling permits, proactively follow up to ensure permits are obtained on time. If the subcontractor fails to pull required permits, Spartan Plumbing may need to intervene or take over that responsibility to keep the job on schedule. the Production Concierge manages permit tracking for all active jobs. ## Minimum Requirements for Any Subcontractor
Before using a subcontractor:
1. License verification — confirm they hold the appropriate Ohio license for the work
2. Insurance verification — request certificate of insurance; confirm they carry GL and workers comp
3. Add to Tradeshift/ServiceTitan — all subcontractors must be in Spartan's purchasing system before work begins
4. Written scope of work — document exactly what the subcontractor is responsible for; ambiguity creates liability
## Scope Confirmation Before Starting
From Slack: Before starting any subcontracted or multi-party job, confirm exact measurements and specifications with the customer and any involved subcontractors. Scope changes mid-job create disputes that are difficult to resolve. ## Important Notes
- Spartan is responsible to the customer for the subcontractor's work quality — choosing the right subcontractor is Spartan's risk. - Do not use a subcontractor to perform work that Spartan's own license should cover — it creates unnecessary cost and accountability gaps. - Power of Attorney customers: verify POA documentation before commencing any work. ## Related SOPs
- Business Licensing Oversight — license requirements
- Vendor Management & Negotiations — subcontractors as vendors
- Permit Requirements by Job Type — permit responsibility