Subcontracting Control in Public Works: What Changes for Construction Companies in 2026

Key data

Construction companies and subcontractors operating with the General State Administration must prepare for a scenario of increased control. The Joint Commission for Relations with the Court of Auditors has approved the conclusions of the audit report on subcontracting control in works contracts of the Spending Area 2 «Social protection and promotion activities» of the General State Budget, corresponding to fiscal year 2022 and the first semester of 2023.

The resolution, approved on February 24, 2026 and published in the BOE on April 21, 2026 (reference BOE-A-2026-8760), is not a regulatory change in the strict sense, but it has direct consequences: the Court of Auditors' recommendations set the roadmap that contracting administrations must follow to correct the deficiencies detected in their internal control procedures.

What does this regulation establish?

The audit report has an evaluative approach: it not only audits accounts, but analyzes whether the State's contracting bodies fulfilled their obligation to adequately supervise subcontracting chains in works financed with public funds intended for social protection.

The scope of the analysis focuses on two key elements:

• What was audited: The control and supervision of subcontracting in works contracts of Spending Area 2 «Social protection and promotion activities» of the PGE.
• Period analyzed: Fiscal year 2022 and first semester of 2023.

The conclusions indicate that contracting bodies did not supervise subcontracting chains with sufficient rigor. This implies that, in practice, there were public works contracts in which the administration did not have complete visibility over who actually performed the work or under what conditions.

As a result, the Joint Commission approves these conclusions and, with this, politically supports the improvement recommendations directed at contracting administrations. These recommendations may lead to changes in procurement specifications, internal control procedures, and requirements imposed on main contractors and subcontractors.

Economic and operational impact

The impact is not a direct penalty or a new fee. The real impact is operational and compliance-related, with indirect economic consequences:

• Greater administrative burden: Contracting administrations will implement stricter procedures for verifying subcontractors, which will result in more documentation required from awarded companies.
• Greater traceability of the subcontracting chain: Construction companies must prove and document in greater detail who executes each part of the work, under what conditions, and with what qualifications.
• Risk in future tenders: Companies that do not have well-documented internal subcontracting control procedures may encounter difficulties in future tenders or in contract execution if administrations tighten the specifications.
• Possible retroactive audits: The Court of Auditors' recommendations may motivate reviews of ongoing or recent contracts in the social protection field.

Who does it affect?

• State contracting administrations that manage works contracts in Spending Area 2 (social protection and promotion): they are the main recipients of improvement recommendations.
• Construction companies awarded public works contracts with the General State Administration in the social protection field.
• Subcontractors participating in the execution of public works financed with funds from Spending Area 2 of the PGE.
• Legal advisors and compliance officers of companies in the construction sector working with state public administrations.
• CFOs and operations directors of medium and large construction companies with active public contracts or in the bidding process.

Practical example

A medium-sized construction company has been awarded a contract for rehabilitation works at an elderly care center, financed from Spending Area 2 of the PGE. To execute the installation work, it has subcontracted a specialized company, which in turn has subcontracted part of the electrical work to a self-employed worker.

Until now, the contracting administration had not required detailed documentation on that second level of subcontracting. Following the Court of Auditors' recommendations, the administration may require the main contractor to prove and report the entire chain: who is the first-level subcontractor, who is the second-level subcontractor, what percentage of the contract each one executes, and whether they meet the qualifying requirements.

If the construction company does not have this traceability system implemented, it must create it before new specifications are formalized or before the administration conducts an inspection of contract execution.

What should companies do now?

1. Review internal subcontracting control procedures: Verify that a documented system exists to record and prove all levels of subcontracting in public works contracts.
2. Audit active public contracts in the social protection field: Identify which current contracts are linked to Spending Area 2 of the PGE and review whether the subcontracting chain is properly documented and communicated to the administration.
3. Anticipate new requirements in specifications: In upcoming public works tenders in this field, expect more detailed requirements on identification, qualification, and control of subcontractors. Prepare documentation in advance.
4. Train the contract management team: Ensure that those responsible for executing public works are aware of the communication and subcontracting control obligations established in the Law 9/2017 on Public Sector Contracts.
5. Consult with specialized public procurement advisors: If the company has active contracts or contracts in the adjudication process in the social protection field, now is the time to review regulatory compliance with a specialist before new formalized requirements arrive.