Digitize Subcontractor Agreements to Accelerate Your Construction Firm

Nowhere is the adage “time is money” more applicable than in the construction industry. Yet according to a survey by the Associated General Contractors of America, as of late 2021, 88% of construction firms have experienced major project stalls in the past two years.

Contributing to the trend: supply chain delays, a lack of viable construction talent and unexpected subcontractor expenses. In addition to these external factors, managing the contract process with a makeshift workflow of Word documents, inboxes, spreadsheets, local hard drives and other tools can prevent projects from moving forward.

You may be spending hours combing through each new version of a subcontractor agreement to make sure terms are correct, which takes time away from negotiating fees, starting projects sooner and growing your business. And then there’s the hassle of potentially having to defend your version of a final document in a legal context.

Digital subcontractor agreements and other construction documents can give your company more gain and less pain.

Docusign offers two solutions that help keep you on track, while boosting productivity and, potentially, profits.

Use Docusign eSignature for subcontractor agreements

E-signature technology is simple to deploy, easy to use, mobile-friendly and legally valid in all U.S. states. While pen-and-paper signatures can be forged and altered, electronic signatures have multiple layers of security and authentication built into them.

Docusign eSignature comes with an electronic record that serves as an audit trail and proof of your signing transaction. eSignature also offers multiple options for verifying a signer’s identity before they can access the document, including email, phone and SMS authentication. And the same safeguards for devices such as desktop and laptop computers protect documents accessed on smartphones or tablets. A signer can complete document fields with a simple press of their finger rather than pinching, zooming and scrolling through a PDF on their device.

Using eSignature for subcontractor agreements and other construction forms can benefit your business by reducing hard costs such as paper, printing and shipping. eSignature also reduces the time your employees spend chasing paper, correcting errors and tracking down signatures. In fact, 80% of all successful transactions on the Docusign platform are completed in less than 24 hours.

Use templates to stay a step ahead

It’s easy to email a single contract, like a subcontractor agreement, to one subcontractor. But how about when you’re considering the dozens of subcontractors you hire per project?

You’re busy. You shouldn’t have to create a new, slightly altered draft each time you want to employ another sub. This wastes time and opens you to inadvertent errors.

Docusign eSignature templates can help. These let you save and reuse the most common, repeatable information on every document. You can also easily add personalized information and delete unnecessary clauses, depending upon your recipient.

Use eSignature templates for these common construction forms:

• Subcontractor agreements 

• Lien waivers 

• Warranties

• Change orders

Once a sub receives your template and is notified through email, eSignature adds clear graphic markers to step them through the signing process, then stores each digital document on your Docusign home page after signing.

eSignature can also help prevent an unfortunate truth within the construction industry: Subcontractors sometimes change verbiage in already-signed and countersigned Word or PDF documents, for their own benefit. Which is technically fraud, but it’s also something you may have to prove in a legal setting.

Through eSignature, you’re notified every time a change happens in a document you’re collaborating on. If alterations that aren’t agreed upon are made, you can see them immediately and take steps to cover yourself.

It’s a great idea to work with your construction company’s attorney or an affordable online legal service like LegalZoom, to create initial drafts of your document templates in Word or Google Docs. This way, you can amend each base template prior to transmitting to subcontractors through eSignature. You can also integrate a Word or Google Doc template with eSignature itself, to save even more time.

Using Docusign CLM Essentials

As your construction firm grows, you may get to the point where you need slightly more advanced document redlining capabilities, negotiation workflows and version controls—not to mention the ability to more quickly search across all your agreements.

What is CLM?

Contract lifecycle management (CLM) is the proactive, automated management of the contract process from generation through negotiation, signature, ongoing management and storage. Contract management software like Docusign CLM can easily replace a workflow made up of Word documents, email inboxes and local hard drives to manage contracts. These technologies aren’t really designed to most efficiently manage larger numbers of subcontracting or other agreements, and won’t scale as your agreement volume and complexity increase over time.

CLM software streamlines your digital subcontractor agreement flows by enhancing:

1. Document generation. Be sure you’re using the latest legal-approved and regulatory language through easy access to contract and agreement templates.     

2. Collaboration. Focus more on negotiations and less on paperwork. Send contracts to internal and external parties for review, with the ability to easily redline edits, compare changes and automatically generate a full audit trail.  

3. Workflows. Standardize the routing order for agreements, so the right stakeholders—on both your firm’s side and your subcontractor’s—approve contracts in the right order. 

4. Document management. Store contracts in a central location that’s fully searchable, both by document title and in-document verbiage. Create a single source of truth for your legal department and management.

An affordable way to start 

For all the power CLM can afford you, your firm may not be ready to invest a lot of money into a comprehensive CLM solution. No worries.

Docusign CLM Essentials is specifically built for growing companies that are looking to get started automating the contract process with contract management software.

This introductory solution is designed to help you save time, streamline the project buyout process and centralize your archive of agreement versions. And with a native integration to Docusign eSignature, CLM Essentials can easily route any contract for approval in just a few clicks.

Standardize processes, automate accuracy

Comprehensive workflow management helps you stay in control of document changes and versioning during back-and-forth negotiation with a subcontractor. Send contracts to internal and external parties for review and approval, with full ability to check changes from version to version. You’ll always know the most current iteration of a digital subcontractor agreement.

You’ll also benefit from centralized document storage, which guards against agreement change after signing. Never find yourself sorting through document versions again, as each version is centrally stored. 

And finally, reduce your chances of mistakenly signing an outdated draft, which helps you start the construction process faster and reduce your potential for profit loss—a possible result of accidentally agreeing to obsolete terms.

Learn more about the Docusign Agreement Cloud for Construction.