A subcontractor is a company hired by a general contractor (or prime contractor, or main contractor) to perform a specific task as part of the overall project. A large and common challenge is making prompt payment for services provided to the project by the subcontractor for the originating general contractor.
While the most common concept of a subcontractor is in building works and civil engineering, the range of opportunities for subcontracting is wide, including information technology and information sectors of business. The compatibility and continuity of software and hardware application is a common obstacle given for bringing in new subcontractors.
Ideally, the incentive to hire subcontractors is either to reduce costs, expedite services, or to mitigate project risks. So, why hire an M/WDVBE if the big three reasons are not the priority? Competency builds resources and competition, which makes M/WDBVE an attractive addition to use on a prime project.
In this way the general contractor receives the same or better service than the general contractor could have provided by itself, at lower overall risk. Many subcontractors do work for the same companies rather than different ones. This allows subcontractors to further specialize their skills.
In the American economy, the need to respond to a rapidly changing environment and service a diverse infrastructure has encouraged flexibility and diversity in its subcontractor community with the majority of subcontractors now providing specialised skills to a wide range of companies.