Instruction S2.

Subcontracting Work
1.0

PURPOSE
To establish the responsibilities and methods for planning, developing, performing, and
administering subcontracts in compliance with Bechtel corporate policies.

2.0

SCOPE
This instruction is applicable to all construction projects and subcontracted work and/or
services under the administrative control of Bechtel Construction Operations Incorporated.

3.0

DEFINITIONS
None

4.0

REFERENCES

4.1

Corporate Policy Number 230, Procurement of Goods & Services

4.2

Prime Contracts Management Manual

4.3

Contract/Subcontract Formation Manual

4.4

Contract/Subcontract Management Manual

4.5

Guidelines for Construction Review of Subcontracts during the Formation Process

4.6

Contract/Subcontract Coordinators' Handbook

5.0

RESPONSIBILITIES

5.1

Site Manager
The Site Manager shall ensure that the administration of contracts and subcontracts on
the project complies with the requirements of Corporate Policy Number 230.
Prime contract responsibilities regarding subcontracts or contracts administration and
management should be defined by the Contract Management Responsibilities Matrix (this
document is also known as the Division of Responsibility (DOR) document) for the prime
contract as prepared by the Project Manager. The Site Manager must understand the role
of Construction in the prime contract process, and manage Construction's performance
accordingly.
The Site Manager shall understand the responsibilities for construction during the
formation process as defined by the Contract/Subcontract Formation Manual.
The Site Manager shall understand the responsibilities for administration and management
of subcontracts or contracts, as defined in the Contract/Subcontract Management Manual.

1997 Bechtel Corp.

Site Managers Manual

S2.7-1

Instruction S2.7

6.0

REQUIREMENTS

6.1

Subcontract Formation

Subcontracting Work

a. The Site Manager shall understand the role of Construction in the subcontract planning
and formation process for home office issued subcontracts or contracts. The
Contract/Subcontract Formation Manual is the reference document for understanding
this role.
b. The Site Manager shall coordinate all aspects related to the formation and award of
field issued subcontracts. The Site Manager shall ensure that field formation is
performed in accordance with the Contract/Subcontract Formation Manual.
6.2.

Subcontract Management
The effective management of a subcontract or contract requires performance of many
specific management tasks. Many of these tasks are defined in a sample Division of
Responsibilities (DOR) Matrix shown in Section 2 of the Contract/Subcontract
Management Manual.
A small project may have one DOR for the entire job or a large project may have a
separate DOR for each subcontract. The DORs should be prepared prior to start of work
on a subcontract and will change depending on the stage of the subcontract.
Depending upon the type of subcontract or contract and management structure of the
project, the Site Manager or Project Manager shall determine which tasks must be
performed and who will perform them.
Once a subcontract is in the field, the Site Manager shall ensure that DOR assignments
are made and updated as required.

6.3

Commitment and Signature Authority

a. The Site Manager cannot sign, or have a subcontract signed, without having obtained
proper authority to do so as defined in accordance with Bechtel Policy Number 230.
b. The Site Manager cannot allow a directive change notice, change order, or an
amendment to be issued to a subcontract without having obtained proper authority to
do so in accordance with Bechtel Policy Number 230.

6.4

S2.7-2

Exhibit S2.7-1, Subcontract Administration Rules of the Road, provides general guidance
to construction teams in the field administration and management of construction contracts
and subcontracts.

Site Managers Manual

1997:Rev.3

Subcontracting of Work

Instruction S2.7

SUBCONTRACT ADMINISTRATION
RULES OF THE ROAD
EXHIBIT S2.7-1

1. All subcontract administration procedure will be in compliance with the Bechtel

Contract/Subcontract Management Manual, a.k.a., the Brown Book. Any deviations from the
Brown Book provisions, (e.g., those resulting from client preferences), require review and
approval of the BCOI Manager of Contracts. Specifically included are all documentation (e.g.,
Daily Reports will be used), change control (e.g., standard change notice forms will be used),
and correspondence control measures (e.g., sequential numbering systems for each
subcontract will be applied) stipulated in the Brown Book. Upon their approval, the Site
Manager shall ensure that an electronic copy of the procedures will be sent to the BCOI
Manager of Contracts.
2. All subcontract formation procedures for subcontracts formulated by the construction
organization will be in compliance with the Bechtel Contract/Subcontract Formation Manual,
a.k.a., the Blue Book. Any deviations from the Blue Book provisions, (e.g., those resulting
from client preferences), require review and approval of the BCOI Manager of Contracts.
3. All projects using Bechtel subcontract terms and conditions, Bechtel Pro Forma shall use the
current version of PROFISY (the Procurement Organization system where electronic copies of
documents are stored). Access to PROFISY will be obtained through BecWeb/InfoWorks or
the responsible Regional Manager of Procurement or designee. Any deviations from the
PROFISY Pro Forma require review and written approval of the Regional Manager of
Procurement or designee.
4. Site Managers are responsible for ensuring that a formal Subcontract Administration Division
of Responsibility (DOR) Matrix is established for all major subcontracts on their projects. Any
deviations from the tasks stipulated in the Brown Book are subject to Rule 1.
5. The intent of Corporate Policy 230 is that the same individual is not delegated both Signature
and Approval Authorization. This policy shall be rigorously enforced. All Signature
Authorizations for subcontract changes are to be delegated directly or indirectly by the BCOI
Manager of Contracts. Previously issued delegations from the Procurement Organization are
invalid. Site Managers are normally delegated an appropriate Approval Authority and are
accordingly prohibited from also receiving Signature Authority.
6. In addition to PROFISY, standard subcontract administration automation forms (such as Form
Flow or the MS-Word equivalent forms) shall be used. Any deviations are subject to Rule 1.
Contact the BCOI Manager of Contracts for access to Form Flow and/or the MS-Word
equivalent electronic forms.
7. The Site Manager shall notify the BCOI Manager of Contracts upon 20% and 70% project
construction completion. Subcontracts Operations Reviews shall be performed at these
thresholds by the Contracts Organization, unless the BCOI Manager of Contracts otherwise
waives the requirement.
8. The Site Manager shall ensure that no subcontractor is granted access to the Jobsite until its
insurance certificate has been reviewed and approved by the responsible Subcontract
Administrator, and, if necessary, a representative from the Risk Management Organization.

1997:Rev.3

Site Managers Manual

S2.7-3

Instruction S2.7

Subcontracting Work

SUBCONTRACT ADMINISTRATION
RULES OF THE ROAD
EXHIBIT S2.7-1

9. A Pre-Construction Meeting (PCM) will be help and a formal Kick-off Letter (refer to
Exhibit 3.3.2-B of the Brown Book) issued prior to the start of any Jobsite work. The Site
Manager shall ensure that each subcontractor appoint an Authorized Representative (AR) for
itself, and that its AR be present or represented at the Jobsite at all times when its forces are
at the Jobsite. The counterpart representative for Bechtel and/or Bechtels client will also be
announced in the PCM and documented in the Kick-off Letter, along with any limitations on
the authority of the Bechtel Representatives.
10. Prior to formal closeout of a subcontract, the Site Manager will ensure that electronic copies of
the subcontract scope and reimbursement terms (normally Exhibits D and C of the
subcontracts, respectively) are sent to the BCOI Manager of Contracts.

S2.7-4

Site Managers Manual

1997:Rev.3