Subcontractors are at the mercy of their customers’ prequalification processes. Many of these processes, especially for larger CM/GCs and General Contractors (CM/GCs), are rigid and rigorous. They create a considerable amount of work for the Subcontractor, oftentimes in several different systems that might even incur fees. CM/GCs have every incentive to follow these processes as best they can, so it can be beneficial for a Subcontractor to understand the purpose of the processes, rather than to view them as boxes to check. Although burdensome, these prequalification processes are an excellent opportunity for a Subcontractor to introduce or show off their business, to demonstrate that they are attentive to their prospective customers’ needs, and to leverage the requirements of the application to gather insights on what will define success of a partnership.
A good “prequal” process, or due diligence process as Maple Insight prefers to call it, is critical for CM/GCs and assesses Subcontractor appropriateness on a project. The process weighs a Subcontractor’s financial and operational strengths and can feel invasive and time intensive at times. However, it is a perfect opportunity for a Subcontractor to introduce their business.
A “prequalification” application is akin to a job application - the information provided can realistically be the difference between an award to one Subcontractor over a competitor. This can be the first opportunity to impress staff at a CM/GC with a Subcontractor’s trade experience and business strengths. Even if one has a great relationship with a particular executive, for example, it may be difficult to navigate the process if estimators or purchasing agents are unfamiliar with their business.
Further, as much as it is an opportunity for a Subcontractor to highlight their strengths in their trade, it is also an opportunity to demonstrate their attention to detail and to what is asked of them. Construction is a detail-oriented industry. If a Subcontractor’s first task does not suggest attentiveness to detail, it is often difficult to imagine that behavior to improve later. Instead of treating it as a “check the box” task, a thoroughly completed application is a terrific opportunity to begin building a level of comfort. A proactive partner who is attentive to every detail earns the trust of the project teams and years of repeat business.
An unfortunately common, but grave mistake that many Subcontracting firms make is prioritizing speed over submitting complete and accurate information. Lengthy questionnaires are completed inaccurately and responses that should clearly be “no” are “yes” or vice versa. Blank documents are submitted in lieu of the requested document to trick the system into believing that a condition was satisfied. Volume figures are reported in one section that do not match financial statement information. When a reviewer sees these patterns like these, they immediately distrust the remainder of the information provided and are unlikely to consider the applicant to be a strong fit.
Lastly, for any vendor in any industry, it is important to understand the customer’s needs. In construction, each CM/GC views Subcontract risk slightly differently and has unique needs. A prospective Subcontractor can gain a considerable competitive advantage if they understand and leverage what is important to the CM/GC during the prequalification application review. Again, like a job application, when applying for different jobs or companies, it is best practice to curate your resume (or prequalification application) to your targeted audience.
Some CM/GCs use software tools that are entirely automated to identify certain green or red flags. It helps to understand these triggers and how information can be best represented. Other CM/GCs prefer more holistic review processes in which the breadth of an application and a Subcontractor’s familiarity with their own business stand out. For these CM/GCs, a Subcontractor who can present their weaknesses and plans of action as confidently as they present their strengths is often a much stronger candidate than their peers who lack the same depth. By understanding what is important to a CM/GC, a Subcontractor can submit their application in a way that elevates their chance of winning awards.
"Prequalification" applications vary significantly across different construction managers and general contractors, and due diligence practices can differ widely. Vendors who take the time to understand their clients' needs and tailor their services stand out from the competition. Since prequalification is a critical first step in securing work, it is essential to learn the various processes and tools and to commit to following them thoroughly.
Completely Unrelated Trivia Treasure: The diameter of the moon is 2,159 miles. The straight-line distance from San Francisco to Washington, DC is 2,435 miles.
Maple Insight offers due diligence services tailored to each subcontract, considering both the specific project and the complexities of the Subcontractor. We believe that Subcontractor assessments require detailed, careful evaluation rather than broad generalizations.