Per the US Census Bureau, from 2012-2017, construction spending has doubled. 2019 has also seen massive growth rates, with US construction spending posting its biggest increase in 9 months this past March.
There’s been a growing understanding among general contractors that prequalifying and picking the right subcontractors is crucial to keeping their construction projects on track. With over-worked subcontractors making project delays, experiencing manpower issues and creating defaults, there hasn’t been a more optimal time to reevaluate your subcontractor prequalification process.
Here’s why evaluating and implementing a standardized, streamlined prequalification process focused on risk mitigation can help protect you from picking over-worked subcontractors and ensure project completion success.
Today more than ever, prequalifying subs is crucial for the precon phase. The rise of construction project spending has organically resulted in more contractual defaults. A majority of subcontractors are taking on too much work, leading to over-extension and under-capitalization. This is why requiring current financial statements and using a standardized prequalification assessment process is key in preconstruction.
Luckily, technology has reached the point where it’s now easy to set up a robust, recurring prequalification process that integrates with your bid management workflows. Risk managers no longer have to struggle with effectively analyzing, assessing and communicating plans for subcontractor risk.
Contractors are now able to easily ask for and manage subcontractor project history, financial, past safety performance, quality of work, insurance and other prequal data in one bid management platform. In an ITB software, like SmartBid, precon teams can build their bid lists, assess risk, make decisions about qualification statuses and select the right subs for the project.
GCs can also outsource their prequalification process to further streamline the approval process. SmartBid, for example, offers sub prequal and services like standard prequal forms (ConsensusDocs 721), customized communication templates, qualification calling services, assistance in developing review risk assessment processes and more.
Empower your team today to reexamine your prequal process, automate risk assessment, and guarantee protection.
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