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What is 'Subcontracting'. Subcontracting is the practice of assigning part of the obligations and tasks under a contract to another party known as a subcontractor. Subcontracting is especially prevalent in areas where complex projects are the norm, such as construction and information technology.
Subcontractors are frequently hired to work on construction sites. A subcontractor agreement specifies the terms of a relationship between a contractor and subcontractor, including the type of work the subcontractor is being hired to perform. Electricians may work as subcontractors on a construction project.