This webinar, hosted by Adam Denno from JBKnowledge, Inc. and Evan Sizemore from Lockton, discusses the qualification process contractors use when working with subcontractors to identify and manage the risk of their project partners.
How the top contractors prequalify the subcontractors and manage risk is the first topic discussed and explained. The prequalification process has four parts to a puzzle including dedicated systematic approach, key partnerships, technology, and integration.
A dedicated systematic approach is a key principle to a prequalification process to ensure all risks are taken into account and therefore are better able to manage. By having a dedicated systematic approach to risk management, contractors are better able to mitigate loss.
The second piece of the puzzle refers to the key partnerships contractors have developed. Using partnerships, such as bankers, brokers, insurance entities, and vendors can help support your prequalification process by adding information already inquired through their resources. Sizemore’s advice states contractors should not be afraid to leverage key partners and count on them to help identify risk.
The next key piece to the puzzle is technology. In today’s world, technology is constantly evolving to automate processes and help eliminate human error. Top contractors are involving technology throughout the entire prequalification approach, alleviating administrative burden and ensuring reliable information. Today’s technology makes a detailed prequalification process possible.
This leads us into the final puzzle piece, integration. The prequalification process cannot be successful unless contractors integrate every piece of the puzzle throughout every aspect of their project. These top contractors are successful because they tie all their process information into one easy system with total transparency.
Following the how, Denno and Sizemore discuss when to qualify subcontractors and identify risk. According to the top contractors, contractors should identify risks at every stage of the project from planning, design, pre-construction, construction, and post construction. By identifying risks early on, they can set up a method to manage potential risks. For example, by the pre-construction process, the majority of the bid list has already been qualified and steps are in place to handle “rogue” subcontractors you have no prior information on.
Risk management in the qualification process does not end once construction takes place. Top contractors keep their information up-to-date as they go to ensure everyone understands the risks involved and what the role of the subcontractor is. Post construction qualification is important in order to not overlook safety, insurance, or warranty risks. Also this preps the prequalification for the next project, giving contractors a head start.
As for the why, qualification is important in order to mitigate loss. Defaults are imminent, but how a company manages the risks is what differentiates the top contractors from the rest. Companies can turn profit by performing qualification to proactively manage risk and mitigate as much loss as possible. Having a detailed qualification process that identifies and manages risk is what makes top contractors successful.
Want to watch the full “Subcontractor Prequalification: How, When and Why Top Contractors Do It” webinar? Check out the video below and download the presentation slides at jbknowledge.com/webinar