“Best Prequalify Subcontractor Tips” , the risk management team evaluates the potential danger of working with potential vendors before they are contracted by the estimating team. According to The Horton Group, subcontractor prequalification is “an evaluation of a business’s willingness and ability to buy goods or services on credit.” It’s an important risk management measure in the preconstruction phase of the project.

Why Every Contractor Needs to Prequalify?

It’s all about ensuring you have selected the best possible subcontractors for your construction projects. Many construction companies can seem like a perfect choice for your company, but not necessarily for the next if they didn’t fit with your schedule or budget or other important aspects of your business. Determining “right fit” helps companies eliminate as much risk as possible during preconstruction.

Best Prequalify Subcontractor Tips Practices:

Prequalification is the first step in managing your relationships throughout your business’s network. If a business you have an existing professional relationship with doesn’t have particularly strong subcontractors, there’s no need to prequalify them. Below are some tips on the most essential subcontractor prequalification process frameworks.

  • A business plan allows a startup to get the funding they need to become an established organization. The metrics in a business plan include stability, past performance, safety and financial health.
  • Assess additional higher risk trades such as curtainwall in terms of setting approval authority and limits.
  • An additional assessment of potential subcontractor risk in new markets/geographies can take place.
  • Setting overall company risk tolerance, both in terms of capacity and mitigation strategies
  • Establishing a clear process for review and approval of exceptions is the smartest way to keep the performance from suffering, especially with such tight deadlines on hand.
  • Deciding on a schedule for updating and filing subcontractor qualifications: quarterly, biannual, or annual
  • Coordinating with project management to create feedback loops with onsite teams

From there, one needs to establish a database of prequalified subcontractors they can choose from. Or, you can compile a list before the bid selection or contract award process so that the project’s estimators can evaluate their suitability and past performance ahead of time.

Best Prequalify Subcontractor Tips

How prequalification helps mitigate risk reduction

Let’s be real:.

you sometimes have to work with risky subcontractors. That’s why it’s important to have a qualification process in place that focuses on loss prevention and helps you proactively reduce the scale of impact when subcontractor risks become realized. Analyzing and assessing the risk of your subcontractors is a great first step, but your qualification process needs to be equipped with effective mitigation plans that help you prepare for when risks become reality. TradeTapp makes that easy with automated workflows for product features so that you can create, save, and track contingency plans during each project implementation cycle.

Even if at the beginning of a project a subcontractor looks safe, it’s a good idea to put a plan in place to check in on them as the project progresses. They may have enough money to take on the project, but what if they start another project midway through yours? Prequalification is necessary, but sometimes even the best prequalification and in-process management can still leave you with a problem when it comes down to managing your own team of professionals. To thoroughly manage risk, even an approved subcontractor that is qualified at the outset should still be managed throughout it.

Important Points of a Successful Prequalification Workflow

Point 1: Be comprehensive

This sounds fairly obvious, but it’s nonetheless true: evaluations are most effective when they leverage a comprehensive profile of information and data. With a small business, it means reviewing customer history, past safety performance, backlog position, and quality of work are all key indicators of potential risks in addition to the traditional analysis of financial health.

Point 2: Be project-based

We encourage our clients to take possession of the situation. By creating a situation-based overview, we are able to assess how much freedom of thought the company has had in relation to the potential competition applicants for a given project award. The specifics of each applicant (i.e., their manufacturing, delivery type, ownerships position, employee numbers and others) are significant factors in wining any government tender bid!

Point 3: Be practical

The most important principle of the qualification workflow is that it needs to be practical. As we all are aware, vetting of inputs like a proposal must be an absolute solution in nature – otherwise the operational teams will have a hard time working it into their daily routine. Why? Because they will see it as impractical and they’ll want to either change it completely or ignore its existence altogether. And this is not what our stakeholders signed up for! Instead, we need to make sure that each evaluation is conditional with a “yes but” approach (a logical reason why something should or shouldn’t happen). So these outputs would be: yes but here are the risk management controls we need to implement to do so intelligently otherwise we won’t be able to manage the situation efficiently without proper safeguards in place each step along the way.

Getting Subcontractors to Fill Out Prequalification Forms

Invest in your connection

It’s often said all the time in this industry that, it’s a relationship heavy one. Building strong relationships takes effort on both sides, and one needs to always be mindful of that when speaking to people who work in the same field as you. It might come off as being a little too much or pushy if you try to get into personal matters with your potential subcontractors right away but if you do have an idea of what they deal with between their tenants or coworkers (replacing broken items for example), then feel free to ask them how it was handled. A stronger relationship with your subcontractor could mean they will be more inclined to relish working with you and provide a response. In the construction industry, technology is becoming more and more widely used, but keeping strong relationships involves communication and the human touch. Set up face-to-face meetings to go over any prequalification projects that may have arisen. This serves to eliminate specifics in order to foster long-lasting relationships as it places value on mutually respectful interactions from the start.

Automate your prequalification process

When it comes to managing your subcontractors, any delays in your project’s progress and operations can lead to a higher level of stress for you and the rest of your team. The same applies when working with prequalification processes. With traditional methods, collecting and entering the same information repeatedly over and over again is a big waste of time as well as energy. By automating these processes with intelligent solutions, bakers can streamline their overall operations while eliminating any potential headaches that could have led to increased levels of stress which are capable of either slowing down or derailing projects.

In addition to all that, there are email automation tools such as Zapier and Boomerang that can help with this problem. Subcontractor prequalification software takes it one step further by sending automated follow-ups, reminders and renewals to solicit up-to-date information – saving general contractors hours. Once you’ve compiled accurate information, you can receive automated risk mitigation recommendations to identify and reduce risk early on in the project’s preconstruction process.

Trim down your questionnaire

Create a targeted questionnaire for potential subcontractors and use the best questions from that sample to create other variations of your questionnaire that are more specific to each type of subcontractor or project. One way you can do this efficiently is by evaluating if the variation should be automated or manual, as well as automating feedback forms based on their answers to see which option they prefer so you’ll know whether or not they’re a fit. Additionally, you can also send in these forms via email, collect data metrics, and automate tasks based on their replies.”

Leverage your project teams

The entire organization needs to have a risk mindset when it comes to managing subcontractors. Since project teams are on the front lines talking to subcontractors, they need to be well informed of the prequalification process and should advocate for the risk team by encouraging subcontractors to participate. Communicating the prequalification process to your project teams enables them to answer questions as they arise and fully understand the work flow of your subcontractors.

If you use a homegrown system which is inherently unique to you, the subcontractor has to learn your prequalification ways and form, login process, and submission steps. They have to get used to being able to find their way around your site easily. For example, many contractors like to see job photos when looking for work. With online construction software as mentioned above, your subcontractors can easily navigate each page with all the easy-access links you might have provided from home or office!

Regularly onboard your subcontractors

It’s important to establish the ground work for sub contractors before even sending them a prequalification form. The on boarding process provides your vendors with all the tools they need to start the process, and also answers any questions they may have along the way. With Trade Tap,  you get a team dedicated to supporting your subcontractors – an implementation specialist who knows industry best practices, and many resources for both general contractors and sub-contractors. By improving your prequalification response rate, you’ll be ahead of the game and well suited to mitigate risk before it’s too late.