Splitting a build into trade packages can save money and will certainly move risk onto you. For an owner abroad, that trade is rarely worth making.
A single main contract puts one company in charge of the whole works, including coordination of everything they subcontract. Separate trade packages put you or your manager in that coordinating position, contracting directly with each specialist. The first costs more in contractor overhead and margin. The second costs more in management, risk and the gaps between packages.
Single main contract at a glance
You hold one contract for the whole of the works. The contractor carries responsibility for the result, coordinates every trade, absorbs the risk of gaps between packages, and gives you a single completion date and a single party to pursue if anything fails.
Separate trade packages at a glance
You contract directly with each trade: structure, envelope, mechanical, electrical, finishes. You or your appointed manager sequence them, resolve the interfaces, manage the site facilities and carry the risk when one package delays another. In exchange you remove one layer of overhead and margin.
Who owns the completion date
Single main contract: The contractor, and there is one date to enforce.
Separate trade packages: You, because no single party is responsible for the whole outcome.
Where interface risk sits
Single main contract: With the contractor, who must make the packages meet.
Separate trade packages: With you, and interfaces are where leaks, clashes and disputes concentrate.
Management effort required
Single main contract: Moderate: administer one contract, review one programme, certify one valuation.
Separate trade packages: High: several contracts, several programmes, several valuations and constant sequencing.
Cost profile
Single main contract: Higher headline price including main contractor overhead, preliminaries and margin.
Separate trade packages: Lower package prices, plus your own management cost and the cost of gaps.
Flexibility to change
Single main contract: Lower. Changes are valued through one contract and priced accordingly.
Separate trade packages: Higher. Later packages can be let after decisions are made, which suits phased work.
Who provides site facilities
Single main contract: The contractor, including access, power, welfare, security and cleaning.
Separate trade packages: You, either directly or through one package, and it is routinely underestimated.
Position if something fails
Single main contract: One party to pursue, with one insurance and one guarantee.
Separate trade packages: An argument between packages about whose work caused it, with you in the middle.
When single main contract wins
- Owners outside the country with no full time management presence.
- Projects where a single completion date carries financial consequences.
- Builds where the design is complete enough for a firm price.
- Situations where you would rather pay for certainty than manage for savings.
When separate trade packages wins
- Owners with a genuinely capable construction manager already engaged.
- Projects phased over time where later packages depend on decisions not yet made.
- Fit out and refurbishment work where trades can be sequenced simply.
- Builds where a specialist package dominates and a general contractor would add little.
How to decide
If you are based abroad and do not have a construction manager you would trust with your own money, use a single main contract and spend the saved management effort on supervision and reporting instead. Consider separate packages only where you have real local management capacity, where the work is phased or fit out in nature, or where one specialist package dominates the project. The saving from removing a main contractor margin is real, and it is usually smaller than the cost of the first serious interface failure.
Before choosing packages over a main contract, write down who will do six specific things: sequence the trades week by week, provide and pay for site facilities, resolve an interface dispute between two contractors, hold the programme when one package slips, insure the works as a whole, and certify each valuation. If the answer to any of them is that it will be sorted out at the time, you are not ready to manage packages from another country.
Domira designs, builds and manages projects across Saudi Arabia for owners who are based abroad: land appraisal, feasibility, design, construction, handover and asset management under one accountable contract. Send us the plot or the brief and Domira will put the numbers in front of you before you commit.
Frequently Asked Questions
Is it cheaper to hire trades directly instead of a main contractor?
The package prices are usually lower because you remove one layer of overhead and margin, but the comparison is incomplete until you add your own management cost, site facilities, insurance of the works as a whole, and the cost of delays caused by interfaces nobody owned. On a first project in an unfamiliar market, the apparent saving frequently disappears into those lines.
What is construction management and how does it differ from a main contract?
Under construction management, a firm manages the trade contractors for a fee while you hold the trade contracts directly, so the manager is your agent rather than a party carrying the construction risk. Under a main contract, the contractor holds the trade contracts and carries the risk of the outcome. The difference matters most when something goes wrong, because under construction management the risk was always yours.
Who insures the works when an owner contracts trades separately?
Usually the owner must arrange cover for the works as a whole, because no single contractor has responsibility for all of it, and relying on each trade own policy leaves gaps exactly where damage tends to occur. Discuss the structure with a broker before letting the first package, and confirm how the cover responds where the cause of damage is disputed between two contractors.
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