**6. Conclusion**

General contractor-subcontractor transactions involve a 'high human asset specific investment' and high human asset specificity is a direct result of the production technology used in the construction process. Interdependence among work groups is high, and its predecessors in the construction process define the workplace of a group. General contractors and subcontractors restrict access to transaction relationships increases the frequency of transactions between existing parties and enables them to learn from one another to overcome problems caused by newness. Learning new roles, coordination problems, developing trust and communication routes are some of these problems [50]. While main contractors do not depend on subcontracting alone, they support construction activities with their own resources, including equipment and labor. When the main contractors use their own resources, main contractors' control of the overall quality of construction is vastly improved. The control will be more affective, when the employment is direct. Contractors may get a better quality job, by having direct control on work. There is a looser relationship between employer and employee in subcontracting, and the client and main contractor have very little control over who carries out

66 Sustainable Buildings - Interaction Between a Holistic Conceptual Act and Materials Properties

Subcontracting is another way of managing risks; however, arbitrary passing down risk can create problems, relating to unequal risk allocation. Sometimes, risks not allocated to the party in the best position to manage them. People have less decision power toward the end of the construction supply chain. Increased subcontracting enables the re-distribution of risks between a numbers of subcontractors. In this process, rather than formal quantification and evaluation, perceptions of risk play an important role in determining the allocation of risk

Mbachu [54] analyzed the various ways in which the subcontractor could contribute to the contractor's payment risks and cash flow problems. The results showed that cost management and subcontractor project implementation were the two broad classifications of risk sources. The key issues related to a lack of risk management and administration skills were the results of the evaluation of the various risk factors attributed to the subcontractor have cost management issues. Poor productivity, poor documentation and taking too many jobs at the same time were the three subsets of risk factors under the subcontractor's project implementation role. The major solution overcoming these problems was that using head contractor his/her key skills in risk management, administration and coordination to assist the subcontractor in

Risk commonly transferred to the subcontractor in the construction industry. According to Arditi and Chotibhongs [39], broad form indemnity, which entirely relieves the general contractor and/or owner from covering losses related to the subcontractor's performance of work, regardless of the cause or type of risk is the least balanced approach for a subcontractor. The additional insured endorsement is another risk, which is independent, but can have the same effect. The owner and/or general contractor named as insured under the subcontractor's commercial general liability policy. The waiver of subrogation is a third method of risk transfer that makes the subcontractor responsible for losses controlled by other parties. Signing a waiver, asked by the general contractor and/or owner, protects the subcontractor's insurance

the specialist work under a subcontract [52].

between contractual parties [53].

overcoming these problems [54].

*5.4.2. Managing construction risks with subcontracting*

The construction industry has a dynamic, challenging and high risky business environment. Since the characteristics of the industry is specific and resources used for the production are diverse and at a high rate, the process directly related with sustainability. Sustainable development movement has evolved worldwide for almost two decades and caused significant changes in construction delivery systems. Since sustainable development requires an affective and carefully consuming the resources of the earth, an effective risk management is a key for achieving sustainability in construction projects, in particular building projects, not only to secure work, but also to make profit. In construction industry, uncertainty contributes to most of the problems related to contractual, client and commercial issues. Construction projects are prone to more risk and uncertainty than any other industries, such as production or service industries. Sometimes lack of close collaboration among the stakeholders can enough to lead higher levels of risk for success of the project. A collection of different risk factors occurs for risk management consideration by the Construction Company or contractor. Uncertainty may lead to changes in the performance of the task relating to productivity, work method, supply and quality of labor and materials can affect the construction projects' time and/or cost. It is possible that sometimes uncertainty can lead to the inflated prizing or the deflated pricing in the tendering phase. There are different tools to manage risks of construction. A construction company with a well-prepared contract can overcome the difficulties of uncertainty and achieve low cost by optimizing the cost effectiveness of risk allocation. Construction insurance, surety bonds and subcontracting are the other main affective solutions for the risk management in building construction projects.
