Most of us must be familiar with B2B (Back to Back) based subcontracts between Contractor & Subcontractors. This is done to ensure that Client requirements applicable for Contractor as per Main Contract are equally applied to Subcontractors.
The Contractors accordingly tailor make their Terms & Conditions & Subcontract structure by attaching or by referencing the Main Contract. Additionally, Contractors also include their own specific requirements (e.g. safety, quality, ethics, schedule / milestones, payment terms, compliance requirements, liabilities, etc.). In this way, Contractors consider that their risks are mitigated.
At the same time, it is noted that Subcontractors consider above arrangement as onerous & object either in full or in part. In any case, most of Subcontractors end up in accepting the above arrangement by either compulsion due to tight market conditions or they may consider this as a potential opportunity for claims. Additionally, they may increase the subcontract price by adding additional mark up to cover for any ambiguities / uncertainties in this arrangement.
Please share your experiences in this regard and your views highlighting Pros & Cons on the following:
- Do you consider that B2B is a good arrangement, or
- You advocate that Contractors should develop specific Subcontracts covering all requirements of Main Contracts in the Subcontractor.
- How do you see that B2B principle can be made more fair and effective.
