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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.
Under traditional contract principles, a subcontract bid is an offer to make a contract with the general contractor. Because the offer is not given in exchange for any promise on the part of the general contractor, however, no contract exists between the parties at this point.