Written by Thomas Kellogg, President of Maple Insight
A well-structured prequalification process can be the key to securing the right project partners and avoiding the risks of costly Subcontractor delays. For Construction Managers and General Contractors (CM/GCs), prequalification is essential for identifying Subcontractors who meet both financial and operational requirements. For Subcontractors, a thorough prequalification submission can unlock new project opportunities. This article provides actionable steps for both CM/GCs and Subcontractors to optimize the prequalification process. By emphasizing relevance, precision, and clear communication, here are a few strategies for making the prequalification process as effective as possible for all involved.
Focus on Relevant Information
Construction Managers: Design your prequalification process to gather only information that genuinely matters. Avoid generic questions that add little insight. For instance, asking Subcontractors about their largest project completed may not be useful for assessing a Subcontractor’s fit for a smaller, highly specialized, or time-sensitive project. Further, information revealed by questions regarding legal and safety history often must be verified independently anyways to ensure accuracy, regardless of the response. If the process does not yield reliable, relevant data that screens Subcontractors for the unique needs of each project, it risks becoming a cumbersome formality.
Subcontractors: Invest the necessary time to provide complete, honest, and relevant information. Ensure each response is accurate, detailed, and clear. Avoid submitting incomplete or vague answers just to move through the application quickly - mismatched numbers or unclear responses can decrease your chances of award if the CM/GC team must validate your information further. A reliable, complete submission is not just a compliance step; it is a chance to stand out and make a strong impression.
Treat It Like a Job Interview
Construction Managers: Each submission should be evaluated with the project’s unique needs in mind. Avoid a one-size-fits-all approach; instead, consider the Subcontractor’s suitability for the specific project type and the acceptable risk level. Rather than relying on annual reviews, request updated prequalification submissions for each bid and evaluate each Subcontractor based on the unique needs of the project and the timing of the award. Business circumstances can change, and this approach provides a current picture of each “applicant,” helping you to make informed decisions.
Subcontractors: Present your firm as you would in a job interview, tailoring your responses to the project's specific needs. For example, curating a list of references from projects similar to the one you are bidding on is more relevant than listing only large projects. A follow-up with the CM/GC purchasing team (as appropriate) to emphasize your interest and offer additional information can also set your firm apart, especially if the CM/GC staff is not already familiar with your company. The more trust you can build in a prospective client, and the easier you can make their decision, the better your chance of earning a repeat client.
Quantify Risk for Clear Decision-Making
Construction Managers: Make data-driven prequalification decisions. Instead of relying on subjective ratings like “medium risk” or letter grades, quantify default risk in financial terms to better evaluate risk/reward balance. As yourself: does the potential financial upside justify the risk? Or do the risk indicators suggest the need for additional protective measures? When risks are expressed in quantified terms, teams can make more informed, objective decisions, which ultimately helps keep projects on schedule and within budget.
Subcontractors: When CM/GCs use data-driven insights to make decisions, it is important to provide them with high-quality data. For instance, self-prepared financial documents often present challenges to the CM/GC who must analyze them and assess your appropriateness for a project. Paying an accountant for Reviewed financials may seem costly upfront, but it provides the high-confidence data that CM/GCs need. Providing high-quality and verified data points (in any part of the application, not only the financial component) differentiates your firm and enhances your chances of success.
A successful prequalification process does more than eliminate unfit Subcontractors—it lays the groundwork for long-term partnerships between CM/GCs and dependable trade professionals. By following these strategies, CM/GCs can achieve more informed decision-making, while Subcontractors gain a stronger platform to secure new business and build a lasting reputation.