Six Tips For Successful Subcontractor Pre-qualification

  • Editorial Team
  • Heavy Construction Equipment
  • 3 October 2023

When choosing subcontractors to work with, general contractors must exercise caution. You should pick businesses that can deliver high-quality work that meets your organization’s standards, have a dependable skilled personnel, solid management, and stable finances. You must have a pre-qualification process for sub-contractors in place in order to do this.

Choosing which subcontractors to work with needs research, just like any other business choice. To lower risks that could have an impact on your organization, including subcontractor default or poor work, you should prequalify every subcontractor you are thinking about hiring.

Maybe you regularly work with a group of subcontractors, but what happens if you decide to take on a job in a different state or if all of your usual subcontractors aren’t available? You will eventually work with a subcontractor with whom you have little to no prior experience. Pre-qualifying subcontractors can result in long-lasting, mutually beneficial relationships. Do this before asking for quotes or subcontractor bids.

Some of the essential data you should collect for your subcontractor pre-qualification forms is included below.

Basic Information

You want to find out some fundamental details about the business, such as who owns it, who is in charge now, how many people work there, and which states have contractor licensing requirements. The size and scope of the projects they generally work on as well as their certification as a minority business enterprise are other things you should find out.

Security Reports

You should at the very least obtain their OSHA 300 information, learn about any violations the subcontractor has received, and learn about their Experience Modification Rate for the last three years. You may also find out about their training schedule and whether they hold frequent safety meetings by asking about such things.

Bonding and Surety Capacity

Find out the name, address, and phone number of the subcontractor’s existing surety company. Ask them about their bond rates for particular quantities as well as their capability for bonding on a single project and overall.

Monetary Standing

Ask the subcontractor if they have ever filed for bankruptcy. Inquire about their current year sales, total and current assets, net equity, current liabilities, and average monthly billings, among other financial details.

History of Disputes

The first thing to check is if the subcontractor company or any of the proprietors are involved in any litigation that is currently in progress. Find out if the subcontractor has ever been found in violation of any labor laws, had their license suspended or revoked, or had any lawsuits brought against them by the client. Additionally, find out whether they have ever had a contract terminated and if there have been any contract defaults.

Request References

Request three to four references from possible subcontractors who can attest to the caliber and dependability of their business and personnel as well as the viability of the enterprise.

Final Thoughts on Subcontractor Pre-qualification

The pre-qualification procedure for subcontractors should be simple to access for general contractors. Create a pre-qualification form that can be accessed online and posted on the corporate website. Have a link to the form prominently displayed on the website that lists your subcontractor opportunities or projects that are currently out for bids.

Contact general contractors in your area and request to get pre-qualified with their business if you are a subcontractor seeking new prospects. You don’t have to wait for them to have a position that fits with what your company can do. Get pre-qualified first and take the initiative. As a result, whenever the general contractor has an upcoming project that calls for the services your business offers, they will get in touch with you first.