This paper explains the causes of poor communication between contractor and subcontractor and the need for effective communication which is vital to the successful completion of any construction project. Good communication can improve teamwork and lead to better project collaboration. Poor communication can result in misunderstandings and delays. Communication is simply the exchange of information in order to convey a message and good communication involves being able to transmit your message so it is received and understood by the intended recipients. The performance of construction projects will be adversely affected if the relationships between contractors and subcontractors are not properly managed. Therefore, the relationships between contractors and subcontractors are becoming more and more important to the success of construction projects. Contractors in the local industry can be classified into four clusters according to the nature of their relationship with subcontractors, namely, adversarial, co-opetitive, collaborative, and partnering. Furthermore, the impact of these relationships on contractor competitiveness and the critical factors affecting collaborative⁄partnering relationships with subcontractors will be examined.