Subcontractors - What Should You Be Asking For- July 6, 2015

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QUESTION:  SUBCONTRACTORS - WHAT SHOULD YOU BE ASKING FOR
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Ken
    We have your Standard Subcontractor Agreement. We are interested in working with an independent, licensed, Limited Energy Technician, and are not sure how much we need to ask from him in addition to a copy of his signature on the contract, LEA license, and liability insurance certificate.
    Can you make a recommendation regarding Business license, Contractor’s license, Driver’s License, drug testing, background check, DMV report.  Are we asking for too much?
Your help would be greatly appreciated.
Thanks,
J
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RESPONSE
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    Selecting and engaging subcontractors isn't a simple matter [good ones are also hard to find].  If you are engaging the subcontractor then you are the Contractor.  The Subcontractor is the one you engage to do the work.  Though both of you share the goal of completing the job, getting paid and not having any liability, the common ground ends there.  Each of you have your own concerns, duties and responsibilities and the Agreement between Contractor and Subcontractor can be and is written from one, not both, perspective.  An easy example of divergent interests is the indemnity requirement.  A Contractor wants the Subcontractor to provide indemnity and the Subcontractor wants the Contractor to provide indemnity.  
    When you order the Standard Subcontractor Agreement we provide two forms, one to be used if you're the Contractor and the other if you're the Subcontractor.  Essentially we flip around contract provisions.
    A Contractor is responsible for selecting an appropriate Subcontractor, and by that I mean one competent, both legally and actually, to do the work.  Legally means the Subcontractor has all the necessary licenses required.  Actually means actually competent to do the work, since unfortunately a license does not always guarantee.  
    If you read the Standard Form Subcontract you will see that it starts with two assumptions or requirements.  Both Contractor and Subcontractor need to possess the necessary license to contract for and perform the work, and the Contractor has to represent that it has entered into a contract with the customer that protects both Contractor and Subcontractor.  If the Subcontractor is not certain that such subscriber contract exists, or questions it's effectiveness to provide insulation from liability, then the Subcontract should pass on the work or insist that the subscriber/customer sign a contract directly with the Subcontractor for the work to be performed by the Subcontractor.
    Both Contractor and Subcontractor should carry all required insurance [workers comp, disability] and insurance specific to the alarm industry [general liability with errors and omissions].  
    A Contractor engaging a Subcontractor needs to obtain the license and insurance.  If competency certification is necessary then ask for that too.  While you may want copies of drivers license, social security cards, tax id receipt, maybe previously filed tax returns, these items, though possibly useful later should there be problems, are not necessary.