When your company is dependent upon subcontractors to fulfill critical responsibilities, it’s imperative that a successful partnership is formed because their failures will reflect poorly on your firm.
We all want competitive pricing from subcontractors in order to get an edge. The question is: How do we go about getting the most competitive price without compromising quality and time while still making sure that their prices are adequate for them to do the work?
Prequalification is important to answer this question. Subcontractor failure is one of the biggest risks faced by GCs. One of the most effective strategies for minimizing the risk is subcontractor prequalification. The pre-qualification route is all about discovery. It helps to assess financial condition, review safety records, and obtain insurance coverage as well as other factors. We use this as a guide to help us seek out the best subcontractors that don’t come with risk.
We ask that all subcontractors who wish to bid on our projects be prequalified. We have streamlined our process so that a subcontractor can fill out the form online. This expedites the prequalification process.
Part of maintaining a relationship with a subcontractor is to provide feedback after the completion of a project. Be honest and accurate about the quality of the work and the contractor’s skills. We have all heard of the stories of General Contractors who show disrespect to their subs or refuse to make the final payments. Then they hire a new set of subs for each project. By doing so, an opportunity to build effective long-term relationships is missed. Building long-term relationships not only improves your reputation but also goes a long way toward increasing the quality of your work.
It is important to keep the lines of communication open from beginning to end, starting with the invitation to be part of a project through project completion. It’s important for subcontractors to see that the GC is invested in addressing their concerns. It’s tough to hear sometimes from subcontractors that they will not bid because they did not receive feedback on their proposals and where they placed in the bidding process against their competitors. At Tocci, we send out communication through our bidding software to all subcontractors who received invites on projects to provide them with a status update. The responses from subcontractors were overwhelming in favor of this type of continuous, open communication. Maintaining an open dialog with a sub can help smooth over any bumps that arise when their bid is not accepted on a project and being honest about their strengths and weakness when asked.
Since a General Contractor’s job is to complete a project on time and on budget, it is important that the bidding process for the subs remain competitive. As a result, not every job can or should go to the same subs.