Sub-contracting policies: The case of the construction firms in brazil

Construction projects in Brazil are more and more undertaken by sub-contractors under the direction of a major contractor, in common with to what is happening in different parts of the world (Cardoso 1996). Construction projects are executed by general contractors who retain the services of special trade sub-contractors (Eccles, 1981). This paper documents the results of an exploratory study about the level of integration found in a sample of 60 building companies of Florianópolis, a city of some 300,000 inhabitants in the south of Brazil. An analysis was conducted on the contractual relationships between general contractors and sub-contractors of 20 companies. The paper initially investigates the issues general contractors have to face when they decide to integrate their business with those of the sub-contractors. In order to do so corporate and operational strategies concepts are brought into light. It then investigates the process of organization and management of sub-contractors in these companies focusing on the contractor’s and sub-contractor’s perceptions. An analytical framework describes the contractor and sub-contractor relationships including the selection criterion, partnering development, conflict resolution, process control and legal contracts. The data was collected through structured questionnaires. Differences found between the two groups, general contractors and sub-contractors are discussed.