By Bespoke Metrics
With the increased adoption of prequalification technology supporting risk management, inefficiencies and inequalities are beginning to surface, particularly for subcontractors. This needs to be resolved by educating and empowering the subcontractor with digital tools that support their needs.
Traditionally, prequalification has focused solely on the needs of general contractors, and has only become more so, with the increasing pressure from owners and insurers to implement stronger risk management standards, along with increased data requirements (environmental, sustainability, diversity, corporate governance) being implemented down the supply chain.
The pressure to fulfill requirements intensifies during The Great Expiry, which occurs every April through June as the majority of prequalifications expire. With newly available financial data, a lack of standardization and the rise in volume creates the perfect storm of repetitive requests and the duplication of effort across the country.
Due to the increased workloads and deadlines, the quality (accuracy, timeliness and completeness) of the data provided suffers. In response, some general contractors implement stronger enforcement strategies by tying it to bid invitations, awarded contracts or payment, further increasing inequalities and lack of control on the part of the subcontractor.
Engaging the subcontractor can help resolve a number of these issues. A COMPASS survey found the top five items that would enhance the subcontractor prequalification experience:
The most common feedback is the push to standardize requirements on a single platform. The reason for different requirements stems from a lack of direction and definition of prequalification. Each general contractor has taken it upon themselves to implement their version of prequalification, creating a fragmented process for the industry and ultimately passing on the data requirement burden to their subcontracting partners. Many organizations have tried and failed to bring the industry together due to the customization of the data requirements for each general contractor.
Andrew of Compass Constructors – “If subcontractors could cut the number of prequalifications, we would be happy to take a little more time to complete a “prequel” that a large number of general contractors would accept.”
Another common concern among subcontractors is identifying strong partners as the financing and payment for project costs are often fronted by the subcontractor. Karin, ABC First Coast Chapter sees an opportunity for the prequalification to work in both ways: “Prequalification needs to be truly counterpart to ensure subcontractors are entering contracts with strong general contractors with good payment track record and contract terms.”
Standardization allows subcontractors to receive feedback and transparency on not only the contract sizes they are qualified to complete, but also the factors that influence their capacity and expertise to complete larger jobs to grow with their general contractor partners. Eli of Nexen Construction is taking one step further by using prequalification to market and promote themselves on why they’re the best for the job. “We are constantly looking for ways to edge over our competition. Utilizing COMPASS is a great way to show our strength, sophistication and proactiveness to win more jobs.”
Michael, of Bespoke Metrics: “In today’s data-centric world, subcontractors that provide their data in a “free” prequalification platform are doing themselves a disservice. They are no longer a partner or a customer. The subcontractor and their data are now the end product.”
Risk management and appropriate data usage through technology will continue to increase in importance, volume and requirement. COMPASS by Bespoke Metrics recommends that our trade partners be proactive to learn and understand the technology out there to better support your business. Speak up and take control of your prequalification before it defines you and this becomes the new normal.
About Bespoke Metrics
COMPASS by Bespoke Metrics is a leading prequalification platform that supports data collection, verification and analytics across the entire construction supply chain. To learn more about Bespoke Metrics, visit https://compass.bespokemetrics.com/ or email info@compass-app.com to schedule a demo.
