Self-perform or subcontract: deciding scope by scope with five questions
Your own crew could perform the scope, and the subcontract quote appears higher than the estimate’s labour line. The team is ready to keep the work in-house. Nobody has yet checked equipment, supervision or the crew’s other commitments during the required period.
Compare self-performing and subcontracting using five questions: whether the people are available when needed, whether you know the full delivery cost, who can manage the risks, how cash timing differs, and whether the scope fits the company’s capabilities and direction. Record the alternatives and reasons before buyout. A lower labour allowance alone is not a complete comparison with a subcontract price that covers a wider package.
Compare the same scope on both sides
- Define the package consistently. Identify the work, exclusions, schedule, quality requirements and interfaces. Reconcile what the subcontractor’s quote includes with what the in-house estimate assumes before comparing totals.
- Check actual crew capacity. Confirm availability with operations for the required period, including supervision and absence cover. Identify which other work would move if this crew takes the scope.
- Build the in-house cost on a checked basis. Include the appropriate labour, equipment, materials, supervision and support under the company’s costing method. Use relevant completed-job evidence and explain differences in access or conditions.
- Review competence and risk with the responsible leads. Consider quality, safety, technical and commercial responsibilities for each option. A subcontract does not automatically transfer every obligation, and an available crew is not automatically qualified for an unfamiliar system.
- Compare cash timing and practical dependencies. Ask the controller about the forecast payment pattern, and check materials, equipment and technical releases. Do not infer funding availability simply from a favourable budget comparison.
- Record the decision and conditions. Put all five answers in writing, including whether this scope fits the work the company wants to develop or repeat. State the preferred option, alternatives, unresolved checks and authorized decision-maker before buyout. If a condition changes, revisit the comparison rather than defending the original choice out of habit.
Common mistakes
- Comparing a labour-only allowance with a complete subcontract package.
- Assuming the company crew is available because it exists on the payroll.
- Describing a subcontract as transferring all project risk without checking the agreement.
Action list
The written comparison should show
- A consistent package scope.
- Confirmed people and timing.
- A complete, explained cost basis.
- Competence and risk checks.
- Cash assumptions, company direction and the authorized choice.
Check your understanding
The self-perform estimate is lower, but the required specialist equipment is unconfirmed. Is the decision ready?
