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Subcontract and Labour-Contract Agreements: What They Must Contain

What a subcontract or labour-contract (borongan) agreement needs to protect the contractor: scope and limits, price, schedule, payment on measurement, an advance limit, retention, quality, variations, safety and termination. A blockwork labour-contract example.

Komander.ai Panduan team · 2 min read · Updated 9 October 2026

Many site problems start with a one-page labour contract: unclear scope, unlimited advances, and no rule for work that must be redone. A tidy contract need not be long, but it must answer the questions that will certainly come up.

Joint measurementValue of work measuredMinus advancesMinus retentionPaid
Labour-contract payments always follow measurement, not requests.

Clauses it must have

ClauseContentsExample
Scope and limitsWhat work, where, to which drawings; who supplies materials and toolsBlockwork on block C5, materials from the contractor, hand tools from the foreman
PricePer unit, lump sum or daily; what it includes600 m2 × Rp35,000 per m2 = Rp21,000,000
ScheduleStart, finish, and late sanctions6 weeks, following the project schedule
PaymentOn regular measurement; an advance limitWeekly measurement; advances up to 80% of the value measured
RetentionThe part held until the maintenance period5%, paid after the project’s first handover
QualityStandards, inspection, repairs at the foreman’s costWalls plumb and true; repairs at no extra cost
VariationsOnly with a written instructionPriced at the contract unit rates
SafetySafety gear, safe working, responsibility for accidentsHelmets and boots required
TerminationWhen the contract can be ended and how the last payment is worked outIf more than 2 weeks late without reason

Keeping it in line with the main contract

Common mistakes

Start from a template

The full guide is in How to build a construction cost report that catches overruns early. It has a free template (Excel or Google Sheets) and a checker that reads your own workbook.

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When your workbook is complete, apply for a pilot: we help connect your project data to the Finance, Cost and Scheduler agents and review the first reports with you.

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Send to melwani@komander.ai. Your workbook check result is included when there is one; the workbook itself is not sent.

Common questions

What goes into a labour-contract agreement?

Scope and limits, price, schedule, payment on measurement, an advance limit, retention, quality, variations, safety and termination.

What advance limit is safe?

A share of the value of work already measured, for example 80%, so the foreman is never paid ahead of the work.

Why must the subcontract match the main contract?

So the quality, schedule and maintenance obligations to the client are also carried by the subcontractor for their work.