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Obligations relating to subcontractors

📐 Article6 min read

What you will learn Why subcontractors are separately regulated, what goes in September, what stays, what it means in practice, and what an authority should still consider.

A construction project usually involves many firms. The authority has a contractual relationship with only one of them, and the whole body of subcontracting rules follows from that.

1. Why subcontractors are separately regulated

Three reasons. The party actually doing the work is often not the contracting party, so the authority cannot see who is building.

The terms on which a subcontractor is engaged affect the quality of the work, without the authority being able to shape them directly. The effect is indirect but real.

A subcontracting chain can run through several tiers, which blurs responsibility. Responsibility must be settled in the contract.

The purpose of the regulation is therefore transparency, not the restriction of subcontracting. Subcontracting itself is normal and necessary in construction, since no firm performs every trade in house.

2. What goes in September

According to institutional sources the burden falls in two ways. Both concern the volume of evidence.

What goes For whom
The duty to request evidence of subcontractors' average wages both
The monetary threshold for the obligations rises €150,000 → €500,000 the authority

According to professional sources the obligations relating to subcontractors are tied to the same monetary threshold as the abnormally low tender check, and that threshold rises to €500,000. That line changes in September.

The practical consequence is that in medium sized construction procurements the volume of documents to be collected falls appreciably. The precise list of requirements being removed must be checked against the adopted text of the law, since the sources describe the change in general terms.

3. What stays

Three things do not go, and the second is the most important. It concerns the main contractor's liability.

The duty to name subcontractors, where the authority has provided for it in the procurement documents. The requirement then has to be met.

The main contractor's liability for the subcontractor's work, which arises from the contract, not from procurement law. It cannot be passed down the chain.

Employment and tax law requirements, which apply regardless of the Public Procurement Act. They sit in separate statutes.

The second point is frequently misread: the disappearance of procedural obligations does not change the contractual chain of liability. The main contractor answers to the client for the whole of the work, including the part performed by a subcontractor. Amending the Public Procurement Act does not touch the law of obligations.

4. What it means in practice

Three consequences pull in different directions, and the third is rarely mentioned. It concerns the traceability of documents.

For whom What changes Direction
Tenderer the document collection burden falls favourable
Authority the checking burden falls, but so does visibility into the chain mixed
Subcontractor the indirect protection from evidence requests falls unfavourable

The third row is the other side of the change: reducing burden also reduces oversight. Whether that is good or bad depends on how well the market regulates itself, and practice will show.

5. What an authority should still consider

Three options remain available through the procurement documents. Each has to be provided for in advance.

Require subcontractors to be named where the procurement is large or sensitive. Naming makes the chain visible.

Provide for a procedure governing changes of subcontractor, so the chain does not shift unnoticed. Any change is then approved first.

Tie quality requirements to the contract, not to the procedure. The contract survives the award.

The third point is the most durable: the contract runs for the whole construction period, the procedure ends when the contract is signed. An authority that wants influence over the subcontracting chain can exert it more effectively through the contract than through the procedure, and the reform does not touch the contract.

In summary, and four practical rules

The purpose of subcontracting rules is transparency, because the authority has a contractual relationship only with the main contractor. On 1 September 2026 the duty to request evidence of subcontractors' average wages is removed, and the monetary threshold for the obligations rises from €150,000 to €500,000. The requirement to name subcontractors in the procurement documents, the main contractor's contractual liability, and employment law requirements are unchanged.

Four rules: check which rules apply, depending on the date the procedure was launched. Do not confuse procedural obligations with contractual liability. Use the procurement documents where visibility into the subcontracting chain matters to the authority. Check the precise list of removed requirements against the adopted text of the law.

This article serves professional orientation at the date of checking. It does not replace the Public Procurement Act or information published by the Ministry of Finance.

Frequently asked questions

That depends on the procurement documents. The duty to name them remains where the authority has provided for it, so the requirement has to be read from each procurement separately.

The volume of evidence required falls and the obligations are tied to the new threshold. The substantive requirements arising from employment and tax law are unchanged.

The main contractor, and that liability arises from the contract rather than from the Public Procurement Act. It cannot be passed down the subcontracting chain.

Only where the procurement documents or the contract allow it, and by the procedure they lay down. Without such a procedure the chain can change without the authority's knowledge.

Public construction procurement in Estonia: thresholds, procedures and the 2026 reform