The “bait-and-switch” risk: Capability arbitrage, cost arbitrage, and access harvesting
Bottom line
Unauthorized subcontracting is not just a quality issue. It can be a control and access issue when work is performed by someone who was never screened, approved, or contractually bound.
Executive summary
In contingent delivery, unauthorized subcontracting can appear as “help” or “team support.” In reality it can be:
- Capability arbitrage (someone else does the hard parts)
- Cost arbitrage (cheaper labor substituted without approval)
- Access harvesting (approved credentials used to funnel access to others)
This is a procurement risk because it undermines who you think you contracted with, who is accountable, and who has access.
A short field vignette
A contractor’s output is strong, but collaboration is inconsistent. Meetings are avoided. Work arrives in batches. Later, the manager discovers multiple people are contributing behind the scenes. No one can confirm who touched the systems or data.
Procurement takeaway
Subcontracting can be legitimate when it is disclosed, governed, and approved. The risk is when it is undisclosed, unmanaged, and unverified.
Start here
Clarify: where subcontracting is allowed, and what disclosure + approval looks like for contingent roles.
About the author
Simon Gray, Vice President, Workforce Solutions
With over 25 years of experience in strategic staffing, Simon leads Procom’s Workforce Solutions division to help clients hire quickly and compliantly.
