Importance of Pre Qualifying Subcontractors

As a general contractor, you are responsible for how a project turns out. Therefore, you need to make sure that you are making smart decisions such as prequalifying your subcontractors. Before you bid on a project, you need to make sure that you have all your cards in order. To do that, you need to make sure that your subcontractors are ready to take on the project. This has become even more important now since material prices are so volatile and there is a shortage of labor in the industry which could ultimately result in the project getting delayed. 

These things usually have a trickle-down impact on the progress of a project. If your subcontractors are not able to pay their suppliers on time, your project will face the consequences of it. It is risky not to prequalify a subcontractor before bidding on a project. You can use best practices to prequalify your subcontractors. 

Things to Find Out About Potential Subcontractors

For an effective prequalification, you need to do more than just ensuring that they are within the budget. Make sure that you find a contractor and heavy equipment trader who can finish his work before the project is due. You also need to find out if there are any safety or financial risks that hiring a particular subcontractor will have to the project. The following are a few things that you should find out about your subcontractors before bidding on a project.

Company Information

The first thing you need to do is find out general information about the company. Find out who the company owner is, how many workers are employed by them, and how they are managed. See that they meet all the licensing requirements of your state. 

Work History

If you ask the subcontractors for a portfolio with their project history, you will be able to understand their style of work and the kind of projects that they are able to handle best. It will also give you an idea of their experience level. You will be better able to know whether their skills will meet your project requirements.

Professionalism

When you are hiring a subcontractor, you want them to be professional on the job. Make sure that you get a feel for how professional their business is. For instance, if you are going to be bidding on a big project, you do not want to hire someone with next to no experience. 

Licenses

You do not want to put your project at risk by hiring a subcontractor with improper licensing. Before hiring a subcontractor, make sure that you ask them to show you the commonly issued licenses as well as any state specific licenses that are required for your project. If any problem arises in the future and your subcontractor is not licensed, your contract with them would be null and void. 

Insurance / Bonding

Before hiring a subcontractor, make sure that they are bonded. This will protect you from subcontractors who might ditch you in the middle of a project. Subcontractors secure two types of surety bonds, namely performance bonds and payment bonds. Subcontractors should have both these surety bonds so that both you and they are protected.