You may think that the Australian construction industry is pretty straightforward, but once you get involved in bigger projects, you’ll quickly learn that it can be a somewhat complex ecosystem.
If you’re a subcontractor or small construction company trying to grow, understanding the hierarchy, relationships, construction language, and the pressure points that define how big projects get built is crucial. As experts in the industry, we’ve broken down the roles you’ll need to know about.
Who is the client in construction?
The specifics of the client can vary, but the position can be summed up as anyone who has decided to build something. The client sits at the very top of the project hierarchy and will most usually either be a private property developer, corporate or private entity, or a government body commissioning public infrastructure.
The public sector in Australia is usually “the client” on larger projects. Australia has a Major Public Infrastructure Pipeline of around $242 billion over the next five years, so a lot of work will exist within this category.
As a sub-role within this set-up, most clients will appoint a client-side project manager (CSPM) to be the primary point of contact throughout the build. Their job is to keep the project on track with budgets, timelines, and quality expectations. For subbies, the CSPM may be someone you never meet, but their influence shapes everything you need to meet on-site.
What does a head contractor do?
The head contractor is responsible for delivering the whole project. They’re the central hub and are responsible for managing the build while coordinating schedules, contracts, and payments of specialist trades.
However, not all head contractors are the same, and the differences matter. Here is a breakdown of the main types:
- Tier 1
National or multinational agencies like CIMIC Group, Lendlease, or Downer Group. These firms deliver projects valued at $500 million or more and have the capacity to carry significant risk. They subcontract specialist trade packages and handle significant administrative requirements.
- Tier 2
This level manages projects ranging from $50 million to $500 million across construction and civil engineering work and relies heavily on subcontractors.
- Tier 3
These are the most common project partners for smaller subbies. They take on contracts up to $50 million and function almost entirely as coordinators. They will perform some tasks with their own labour, with their subcontractor network handling a large share of the work required.
A head contractor’s responsibilities include:
- Financial management
- Safety compliance and OH&S
- Site facilities (waste management and security)
- Being a single source of truth for project documentation
Important note: Insolvency risk is real. Australia’s construction sector recorded 3,217 insolvencies in 2024, which was the highest of any industry in the country. Always do your due diligence before committing to a project. If you are under pressure to accept delayed payment terms or are asked to start work before contracts are signed, your potential head contractor may be unreliable or unstable.
What is an estimator’s role?
Estimators are responsible for translating the ideas and goals of the project into a financial plan. This can be a tricky role as an overestimation can lose the tender and an underestimation wins you a job that makes, or even costs, money.
The estimating workflow starts with a review of the full tender package, a site visit to identify physical elements not visible on paper and then moves to calculating material quantities. An estimator will gather pricing from subcontractors and suppliers, calculate labour and overhead costs, and build in a risk and contingency allowance.
The culmination of all this can be chaotic as quotes will flood in from multiple subbies, and things need to be compiled accurately and quickly. A missed scope item can translate to a massive loss once construction begins.
What does a construction project manager do?
The project manager delivers the work the estimator has (hopefully) won. Once a tender is awarded, the project manager is in charge of its execution, which can include tasks like scheduling, budgeting, stakeholder coordination, compliance, and most importantly, quality.
The project manager also has some responsibility during the tendering phase, largely in the realm of risk identification. Issues like long lead times for materials, supply chain risks, and providing an overall sense of what is and isn’t realistic in the program. This focus shifts to keeping everything moving when the build commences.
Some of the prime tasks under the project managers’ watch include:
- Creating/maintaining the master schedule
- Filing formal Notices of Delay and Extensions of Time in cases of disruption
- Coordinating client representatives, architects, engineers, and subcontractors
- Processing progress payments
The project manager is often a subbie’s primary day-to-day contact, and life becomes significantly easier for people who have a project manager who offers clear communication, timely responses, and prompt payments. When the project manager, the linchpin of the operation, is disorganised, it can cost everyone involved time and money. E1 (EstimateOne) makes the handover of project details, documentation, and quotes easier to transfer digitally into project management software, reducing information silos that can cause all kinds of headaches during a build.
Who are subcontractors, and why are they so important?
Subcontractors are the individual workers who make up larger build teams, and trust us when we say that they are the lifeblood of the Australian construction industry. Sound like a big claim? We have the stats to prove it:
- Subcontractors generated $116.6 billion in 2023-24
- Around 97.3% of construction businesses employ fewer than 20 people
- About 280,000 businesses operate as subcontract construction service providers
These three stats tell us a story. They tell us that large-scale projects cannot be implemented by the small-staffed construction companies alone; they need the huge network of subcontractors that are pulling in billions of dollars to make it happen.
Demand for skilled trades is high. Electricians, plumbers, carpenters, bricklayers, and tilers are wanted in an industry that is facing a projected labour shortage of 300,000 workers by 2027. Skilled subbies have leverage, and those who form strong relationships will see prolonged benefits.
Subcontractors perform the dual role of business owner and tradesperson, managing their own teams, sourcing materials, carrying insurance, and managing safety and quality requirements. They also have to find their own work, which is where E1’s Tender Noticeboard, which allows subbies to browse hundreds of live projects filtered by trade and location, is extremely useful.
Who are suppliers in the construction equation?
Suppliers provide materials, equipment, and products to the build, and at around a $255.4 billion annual spend, it’s the largest cost category in the sector. Suppliers that have their products specified during the design phase are walking on air, as the chance of a subcontractor purchasing from them during the project is significantly increased.
E1’s Subbie Connect feature helps suppliers reach out to interested parties with competitive quotes early in the tender process. This is a win-win as suppliers can help subbies sharpen their bids while making more sales. As material costs can be a pressure point, and price volatility is tricky to navigate, getting early supplier quotes locked in protects margins and leads to more competitive bids all around.
The importance of understanding who does what
Each of the above roles in the construction hierarchy is crucial, and when looking to enter larger projects, it’s important to choose your build partners carefully. Understanding the trades, sectors, and systems well makes it much easier to work with them.
Simon
Herod
General Manager - Builder
