Performance & Compliance
Subcontractor Performance & Compliance
Overview
The Subcontractor Performance & Compliance framework ensures that all subcontractors engaged by BEC Arabia consistently meet contractual obligations, maintain quality standards, adhere to safety regulations, and comply with KSA laws. This structured approach helps minimize risks, improve efficiency, and ensure that mega projects progress smoothly.
Performance monitoring allows BEC Arabia to:
✅ Ensure subcontractors meet project timelines and quality expectations. ✅ Enforce HSE compliance and mitigate safety risks. ✅ Track subcontractor KPIs for long-term evaluation and future selection. ✅ Identify and resolve non-compliance issues early. ✅ Apply corrective measures or termination if performance does not improve.
Every subcontractor working on a BEC Arabia project is subject to regular evaluations and compliance audits to maintain project standards.
Step-by-Step Performance & Compliance Monitoring Process
1️⃣ Performance Monitoring Criteria
To assess subcontractor performance, BEC Arabia evaluates five key areas:
Performance Area
Evaluation Criteria
Responsible Department
Quality of Work
Adherence to project specifications, zero rework, defect-free delivery.
Engineering & QA/QC
Project Timelines
Completion of milestones as per schedule.
Project Management
HSE Compliance
No safety violations, proper site practices.
HSE Department
Financial Compliance
Adherence to contract payment terms, invoicing accuracy.
Finance
Workforce & Equipment Readiness
Adequate manpower, equipment availability, and mobilization efficiency.
Project & Procurement
Subcontractors receive monthly performance ratings, and those with a rating below 75% are flagged for corrective actions.
2️⃣ Monthly Performance Evaluation Reports
Each subcontractor is required to submit a Monthly Progress Report (MPR) detailing:
📌 Work completed & milestones achieved. 📌 Any delays or challenges faced. 📌 Workforce deployment & productivity. 📌 Equipment status & maintenance records. 📌 HSE performance & incident reports.
The Project Management Team reviews the reports and verifies actual performance on-site.
📌 Template: Monthly Subcontractor Performance Report
3️⃣ Compliance Audits & Safety Inspections
Subcontractors must undergo routine compliance checks to ensure they follow:
✔ HSE regulations and site safety rules. ✔ Legal and financial compliance. ✔ Project quality standards and site protocols.
BEC Arabia conducts two types of audits:
Audit Type
Frequency
Responsible Team
Safety Compliance Audit
Bi-weekly
HSE Team
Work Quality & Progress Audit
Monthly
QA/QC & Project Team
Subcontractors failing two consecutive audits are subject to penalties, re-evaluation, or contract termination.
📌 Template: Subcontractor Compliance Audit Checklist
4️⃣ Handling Non-Compliance Issues
If a subcontractor fails to meet performance or compliance requirements, BEC Arabia follows a structured corrective action plan:
📌 Non-Compliance Process:
✔ Step 1: Issue a formal warning letter specifying violations. ✔ Step 2: Give the subcontractor a defined period for corrective actions. ✔ Step 3: Conduct a follow-up compliance audit. ✔ Step 4: If unresolved, escalate to contract penalties or termination.
Non-Compliance Type
Corrective Action Timeline
Potential Consequences
Minor Safety Violations
48 hours to rectify
Warning letter, training requirement
Quality Issues
5-7 days to rework
Deduction from payments, additional supervision
Repeated Delays
14 days to implement mitigation
Liquidated damages, possible replacement
Major Contract Breach
Immediate resolution
Termination & financial penalties
📌 Template: Subcontractor Non-Compliance Report
5️⃣ Subcontractor Improvement Plans
If a subcontractor is underperforming but not at the stage of termination, BEC Arabia initiates a Subcontractor Improvement Plan (SIP):
📌 Improvement Plan Includes:
✔ Clear corrective actions and deadlines. ✔ Additional training or site supervision. ✔ Weekly progress check-ins and evaluation. ✔ Performance re-evaluation after 30 days.
If the subcontractor fails to improve within 60 days, BEC Arabia may suspend new work orders or terminate the contract.
📌 Template: Subcontractor Improvement Plan
Special Cases & Escalations
🔹 Subcontractor Requests Deadline Extensions
❌ Issue: The subcontractor claims delays due to external factors (weather, material delays). ✅ Solution: ✔ Review justification with Project Team. ✔ If valid, issue a Time Extension Addendum. ✔ If not justified, apply contract penalties for late delivery.
📌 Template: Subcontractor Time Extension Request
🔹 Safety Violation by a Subcontractor
❌ Issue: The subcontractor has repeated HSE violations on-site. ✅ Solution: ✔ Issue a Safety Violation Notice. ✔ Conduct additional safety training. ✔ If the issue continues, suspend site access until resolved.
📌 Template: Subcontractor HSE Violation Report
🔹 Subcontractor Fails to Meet Payment Terms
❌ Issue: Subcontractor refuses to pay labor or suppliers. ✅ Solution: ✔ Escalate to Finance & Legal. ✔ Issue a Payment Non-Compliance Notice. ✔ Withhold project payments if necessary.
📌 Template: Subcontractor Payment Compliance Notice
Documentation & SharePoint Storage
All performance and compliance-related documents must be stored in the Subcontractor SharePoint Folder.
📁 Key Documents Stored in SharePoint
Document
Purpose
Access Link
Monthly Performance Reports
Tracks subcontractor work progress & compliance.
Open Folder
Compliance Audit Checklists
Records results of safety and quality audits.
Open Folder
Non-Compliance Reports
Documents violations and corrective actions.
Open Folder
Subcontractor Improvement Plans
Tracks underperforming subcontractors.
Open Folder
Final Performance Evaluation
Used for subcontractor future selection.
Open Folder
Final Notes & Key Takeaways
✅ Performance tracking ensures subcontractors deliver as per contract. ✅ HSE, quality, and financial compliance are monitored monthly. ✅ Non-compliance is addressed through corrective actions or termination. ✅ All performance-related documents must be stored in SharePoint.
For inquiries, contact [email protected] or the Project Control Team.
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