General Contractors win more projects during the bidding stage when they invite subcontractors that are qualified and experienced to perform the specified work. GCs who invite thousands of subs, hoping to find a good bid, are rarely successful. “Casting a net” produces many unqualified bids and eventually angers the subs. As the economy improves and construction increases, busy subs can be more particular about the projects they bid. When they receive a bid invitation from a GC with a “Bid Shopper” reputation, they will usually discard the message. They feel if the GC doesn’t know what they do or where they do it, the invitation is not worth a response.
Successful General Contractors are diligent about keeping their subcontractors’ qualification information complete and current for targeted messaging. Subs are more responsive to bid invitations for projects that are in their “wheelhouse” because they are more profitable. If they are experienced and/or certified to install the product and/or equipment that was specified for the project, they can produce a lower bid because their labor and material costs will be lower than subs with less or no experience. Those subs must include additional pricing for potential overruns. Another factor which can affect a sub’s response is logistics. Subs located near the project – usually within 30-miles – have fewer traveling expenses in their bid as opposed to subs located further away. If the sub feels high traveling expenses will make their bid less competitive, they will decline the bid invitation.
Most General Contractors update their subcontractors’ qualifications at least once a year. Qualification forms are sent many different ways – email, postal mail, fax, attached to printed plans, or uploaded in digital plan rooms – and returned in many different ways, which can be an administrative challenge. It’s not only difficult to keep track of all the incoming qualification forms – hundreds, maybe thousands – but then someone must review, evaluate, and enter the new and updated information somewhere. That’s not only time-consuming but it can lead to data entry mistakes. These affect the accuracy of your sub selections for project assignments. To streamline the qualification process, there are companies that provide a faster, more efficient way to communicate with your subs that include automatic updates when the forms are returned and approved – no data entry is required. Some companies also collect, maintain and provide key qualification information on subcontractors, which can eliminate this overwhelming responsibility for your company.
Here are the 7 primary qualifications you should solicit from your subs to keep your bid invitations more targeted…
1. Trades Performed: Identify the core trades that your subcontractors perform. Some subs diversify to provide more services. Some subs scale back providing fewer services. Periodic updates from your subs can keep their bid invitations more targeted.
2. Project Specialization: Identify the project types that your subs have had experience and success with – e.g., Retail Stores, Restaurants, Office Buildings, etc. All have subtle distinctions that require a special way to bid and build these projects, which will help you win more work and reduce risk on your jobsite.
3. Geographic Service Area: Typically, subs will only travel 30-60 miles on a project. Beyond that mileage, their bid becomes less competitive due to travel costs. Also, some subs are only licensed to work in certain counties or the franchise they represent may impose boundaries. Consequently, they will often decline or ignore bid invitations that are not in their geographic service area.
4. Labor Affiliation: Identifying whether your sub is a union or non-union company is important information. Projects are bid and constructed differently based on the designated labor affiliation so it’s critical to keep your bid invitations targeted.
5. Licenses: The licensing process tests basic competence as well as screening out dishonest subs. A valid license is the first indication that your sub is a qualified contractor. Make sure their licenses are current.
6. Certifications: Identify the manufacturer brands that your subs have experience installing and/or are certified to install. This will help you get better, more qualified bids. Also, identify their business certifications – e.g., MBE, WBE, DBE, etc. These designations will help you on projects, particularly government, where goals are established for awarding contracts.
7. Completed Projects: Request at least three recent projects that your subs have completed. They should include the project types and locations, who they worked for (Owner or GC reference), the dollar value of each project, and a photograph if available. This information will help validate their experience.
Collecting, maintaining, and updating your subcontractors’ qualification information is a critical but daunting task. Especially, if you have a large private database covering multiple regions. General Contractor bids are so close that the difference between winning and losing a project is often determined by which GC has the most qualified subs submitting bids. If you don’t have the time or the resources to update your subs’ qualifications, there are construction networks that can help. They can also improve communication with your subs during the bidding stage. If you’re still “casting a net” to try to pull in winning bids, there’s a better way. Target your bid invitations to qualified subs – less will provide more.
Ed Haege is the Project Communications Manager at The Blue Book Building & Construction Network. He began his career in the construction industry as a News Reporter for McGraw-Hill Dodge before joining Dutch Boy Waterproofing, Co. as their Sales/Estimator. He later returned to McGraw-Hill Dodge as a Regional News Manager.
Ed joined The Blue Book Network to manage the Research & Development Division and became the BB-Bid Product Manager. His construction bidding knowledge and experience was instrumental in the creation and development of BB-Bid, The Blue Book Network’s bid management system, as well as: SyncWare Plan Room, Vu360, Quick Quotes for Equipment, Materials, and Products. His most recent project is ONETEAM, a bid management and collaboration platform. These workflow solutions are used by General Contractors, Subcontractors, and Facility Managers.