Step by Step:

Use the Subcontractor Flags option to create new flags that you can assign to the subcontractors on a job (Administration > Job Management > General Setup > Sub-Contractor Flags)Generally, you can use these flags to keep track of the status of a subcontractor on a job. For example - RFP Submitted, Proposal Received and Scheduled. 

Step 1: Go to Administration > Job Costing > General Setup > Subcontractor Flags.

Step 2: Click Add to create a new subcontractor flag.

Step 3: Description - Enter the subcontractor flag. For example, RFP Submitted, Proposal.

Step 4: Is Default - Check this box to create a default subcontractor flag. By default, this flag will be selected when you add subcontractors to a job. For example, you can create a flag titled RFP Sent and set that up as the default subcontractor flag. 
Step 5: Click OK to save the new flag. 

 - You can assign the new flag to a subcontractor on a job using the Flag field on the Job Subcontractor screen (Administration > Job Costing > Search Jobs > Open a job > Subcontractors tab > Open or add a subcontractor).