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Tier 1, Tier 2 and Tier 3 construction contractors – what’s the difference?

Supply Chain involvement on a construction site

Wed, 20th Aug, 2025 Updated: Fri, 22nd Aug, 2025

Understanding the best contractor for your construction project is about matching the project's scale and complexity with the right contractor expertise, as well as its budget and required project management approach.

Below, we’ll break down the differences between Tier 1, Tier 2, and Tier 3 contractors, and how they can each bring value to your project.

What are Tier 1, 2 and 3 contractors?

Tier 1 contractors – or main contractors – are large companies with a national presence, leading the industry with their scale and capability. A client will appoint a Tier 1 supplier to lead project delivery.

Tier 1 contractors subcontract works packages to Tier 2 and Tier 3 contractors, making up the construction project’s supply chain.

Tier 2 contractors are also known as subcontractors, working under the main contractor during large construction projects. They are medium sized businesses, managing and delivering key works packages themselves.

Tier 3 contractors are smaller businesses subcontracted by Tier 1 or Tier 2 contractors that are more local trades and suppliers. They might deliver specific tasks that require specific expertise – such as asbestos removal, technical groundworks and specialist trades.

Tier 123 contractors whats the difference 1440 x 602 px 1 — A summary of differences between Tier 1, 2 and 3 contractors

The public sector must be able to depend on contractors to deliver essential projects efficiently. Using top Tier 1 contractors and their supply chains provides greater trust and reliability that projects will be delivered on time, within budget, and with higher quality outcomes for local communities.

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Ensuring an ethical supply chain

As the leading public sector procurement authority, SCAPE is committed to ethical spending of public funds and raising the standards of procurement.

Active measures are in place to ensure that all SCAPE delivery partners act with transparency and integrity, pay their supply chains fairly and promptly, and adhere to ethical labour best practice.

SCAPE frameworks have been verified as Gold Standard because they demonstrate high levels of SME and supply chain engagement. We recognise the important role that our framework delivery partners, local SMEs and supply chains play in delivering better outcomes for local communities.

Our focus on social value creates opportunities for SMEs and microbusinesses to grow and thrive when delivering projects as supply chain partners on our frameworks, keeping the pound local to project delivery and supporting local economies.

Through SCAPE’s suite of frameworks, our public sector clients benefit from the capability, capacity and reliability of our delivery partner contractors.

They bring a proven track record, and thus a high level of assurance, in delivering projects on time, within budget, and to a high standard, regardless of project size or complexity. With enhanced project management expertise and the ability to coordinate extensive supply chains, supported by our ethical practices and policies including fair treatment of subcontractors, the supply chain, and enhanced social value, we can ensure that they are trusted to deliver strong local economic impact and long-term value to communities.