Subcontractor Notification

Subcontractor notification is the mechanism through which contracting authorities maintain visibility over the supply chain delivering a public contract. It addresses one of the core transparency risks in public procurement: that a winning supplier may rely heavily on third parties to perform the contract, and that those third parties may not meet the standards required of the prime contractor.

What is Subcontractor Notification?

Under Directive 2014/24/EU (Article 71), contracting authorities may require prime contractors to disclose the identity of any subcontractors who will carry out a significant share of the works, services, or supplies. The directive also permits member states to extend this obligation to all subcontractors, regardless of their share of the contract.

The notification obligation typically covers:

• the name and contact details of the subcontractor,
• the part of the contract the subcontractor will perform,
• the estimated value or percentage of the contract to be subcontracted,
• confirmation that the subcontractor does not fall within any mandatory or discretionary exclusion grounds.

Contracting authorities may reject proposed subcontractors on the same grounds that they could reject a tenderer, primarily failure to meet mandatory exclusion criteria (such as criminal convictions for fraud, corruption, or money laundering) or failure to meet specific technical or financial requirements set out in the procurement documents.

Some EU member states go further: in Italy, for example, restrictions on the overall percentage of work that may be subcontracted are applied in sectors considered sensitive to organised crime risk. In the UK, the Procurement Act 2023 strengthens supply chain transparency requirements by enabling authorities to impose pre-qualification requirements on key subcontractors.

Changes to the supply chain during contract performance must also be notified. A supplier cannot silently substitute a disclosed subcontractor with a different entity without the authority's approval.

Why it matters for bidders

For prime contractors, subcontractor notification is a compliance obligation that must be built into contract mobilisation processes. Failure to notify can put the contract at risk and may be treated as a material breach. Where key subcontractors are proposed at bid stage, their suitability must be assessed in advance to avoid rejection after award.

For subcontractors, notification requirements provide some protection: once disclosed and accepted, a subcontractor has a formal relationship with the procurement and may benefit from direct payment protections in some jurisdictions.

Example

A Romanian municipality awards a construction contract. The winning contractor intends to subcontract specialist electrical works to three firms. Before contract commencement, the contractor submits subcontractor notification forms for all three, including company registration documents and declarations confirming absence of exclusion grounds. The municipality reviews and accepts two firms but rejects a third due to a recent criminal conviction of one of its directors. The contractor substitutes a compliant alternative subcontractor.

Frequently Asked Questions

Can a contracting authority require direct payment of subcontractors?

Yes, in some jurisdictions. Directive 2014/24/EU permits member states to allow or require direct payment to subcontractors by the contracting authority, particularly to protect against payment failures by prime contractors. This is more common in works contracts and is embedded in national law in several EU member states.

Must all subcontractors be identified at tender stage?

Not always. Many procurement frameworks allow suppliers to name key subcontractors at bid stage (particularly those relied on for selection criteria purposes) while permitting disclosure of others closer to contract commencement. The procurement documents will specify what is required and when.

What happens if a subcontractor changes during the contract?

Any change to a disclosed subcontractor must generally be notified to the contracting authority and approved. Unauthorised substitution of subcontractors can be treated as a contract breach. Authorities may check that replacement subcontractors meet the same suitability standards as the originals.