Subcontractor Prequalification

Department: Project Management

Topic: Subcontractor Prequalification

Process: Subcontractor Prequalification Process for Project Management when ready to award

Objective

To ensure Project Managers follow the company’s protocol for requesting Subcontractor prequalification before contract award when using new subcontractors.

Background

A qualified Subcontractor is one that has been vetted through a series of questions and processes to ensure they can successfully perform their contractual obligations. This process helps mitigate risks for Koester and protect its reputation. By hiring only qualified Subcontractors, Koester’s ability to meet its contractual commitments is strengthened, and the likelihood of project delays or disputes is reduced. Furthermore, if a Subcontractor does not perform or encounters contractual issues, the information gathered through this process ensures that Koester has the necessary documentation to protect its interests.

Things to Consider

Any subcontractor that has not performed work for Koester in the past or has not performed work for 5 years or greater must go through the prequalification process.

Has Project Management done an initial vetting of the Subcontractor?

Any contract, $50,000 or greater, must be prequalified.

Can the Subcontractor be easily replaced? Example being Parking Lot Striper, Signage, Trim carpentry, Equipment Installer. If they can be easily replaced and their contract value is under $20,000, then prequalification review is not required.  

Discretion should be used for individual projects and contracts under $50,000 to determine if prequalification should be performed even if not required.

Subcontractors performing Earthwork, Site Utilities, Mechanical, Electrical, Plumbing, Fire Suppression, are required to be submitted for review regardless of contract value.

Prerequisites

Letter of Intent

Steps

1.       Initial vetting of Subcontractor must be performed by Project Manager. Initial vetting should include ease of contact, verification that entire scope of work is included in proposal, and any negotiations.

2.       Complete the LOI Spreadsheet.

3.       Letter of Intent must be issued before prequalification can be requested.

4.       After issuing Letter of Intent to Subcontractor, forward Letter of Intent and Subcontractor’s primary contact name, email, and phone via email to the designated member of the business development team. Use the LOI Spreadsheet

5.       If sending multiple Subcontractors at once, prioritization must be given by the Project Manager for who needs to be reviewed in what order.

6.       Once received, the business development team member will email the Subcontractor the required form to fill out along with confirming that they received it.

7.       The Subcontractor will be given 5 days to fill out and return the questionnaire. If not received within 5 days, the development team member will contact the Subcontractor to ensure that it gets filled out and returned. If prequalification is a rush matter, the Project Manager must make the business development team member aware so that they can communicate needs to the Subcontractor for an expedited return.

8.       Once the questionnaire is returned, the business development team member will review the answers along with contacting references. Based on the answers, a determination will be made if they are qualified or not.

9.       In the event a Subcontractor is found to not be qualified, the information will be given to Preconstruction leadership for further review to determine if exceptions should be made.

10.   When a Subcontractor is found to be qualified, the Project Management team will be notified via email from the reviewer and the reviewer will list the Subcontractor in Dynamics 365, Building Connected, and Procore as qualified.

11.   When a Subcontractor is found to be not qualified, the Project Management team will be notified via email from the reviewer and the reviewer will list the Subcontractor in Dynamics 365, Building Connected, and Procore as not qualified.

12.   After a Subcontractor is qualified, the next steps of contract award may begin. If a Subcontractor is not qualified, another Subcontractor must be selected.

See Also

Letter of Intent

LOI Spreadsheet