Fix The Prequalification Process (PT 1)

Contributed by Margaret Fisher
Submitted Title 'Waaaaay too much information!' 

The Prequalification Form Gone Rogue

Ever since man stood up and decided he wanted something to cover the opening of his cave, the question exists, “Who can I rely on to do this work?”  It was the dawn of the pre-construction qualification process. Back then, word of mouth or whoever was standing nearby got the job. Things stayed pretty much the same until just a few short decades ago. As the availability of more folks to do the job appeared on the scene, it became necessary to try to find some way to pick just one. But, what should the criteria be?  So some GC’s, not all, started coming up with forms that ask fairly routine questions including your companies vital stats, such as your location, number of employees, last year’s sales, one or two recent projects that they can check out if they are so inclined, etc.   This seems reasonable. In the end, the GC most often thought about who they worked with last and how it went. If it was a pretty good experience, they went with that gut feeling, the comfortable choice.

“More” Isn’t Better; it’s Just More

Today, we are in pre-qualification hell. It is not unusual to be asked to complete a 10-17 page form that takes a minimum of 10 hours to complete. More than one full work day for some. Smaller trades with less than 25 employees probably do not have one person who can afford to dedicate one full day completing these forms. If they are to be completed online, this adds another layer of complexity and additional time. In some cases, the forms cannot advance to the next page if you don’t have one answer at the ready and need to come back to it.

Asking, Asking and More Asking . . .

More and more subcontractors are now calling into question the very nature of some of these questions. The savvy subcontractor has brought prequalification questions to their attorney and accountant prior to completing forms. Generally, recommended by our attorney and our accountant, we do not answer some questions on manual or electronic. Basically, these would be the ones you wouldn’t ask in a hiring situation: Universally unacceptable to ask are questions regarding: Race, Religion, Marital Status, Gender, Sexual Orientation, Age, Military Involvement, Criminal conviction, Political Background, Ethnic Origin. HIPPA laws prohibit additional info sharing.

Here are some examples gathered from various prequalification forms I have seen that are highly questionable:

• How many years has your accountant worked for you? Provide their email address, social security number and home address.
• Attorneys Name social security number, email address, cell phone.
• What percentage of your employees are office workers?
• How many workers do you have with a known skin disease?
• Provide a complete list of all your completed projects from the past 5 years. Please include GC company name, contact phone number and email address, owners name and email address, address, architectural firm, contact architect, phone number and email address, Contract price, what LEED Credits were accomplished on each project. Reasons credits were not earned on each project. 

That last one, well, if you think about it, how long would it take you to put that info together on just one project that you did 4-5 years ago? Now multiply that times perhaps 50 projects per year and multiply that times 5. As you can guess, it would take weeks to create that whole list and it would be about 125 pages long. How does this help anything? And I’m sure all those contacts they are asking for would not be pleased to find out we broadcast their phone numbers and email addresses on a form that could be viewed by who knows how many people. Again, how does ALL this prove skill or quality? That important information never comes up.

Two Way Street

Loyalty is a two way street. What assures the subcontractor that they will be working with a GC that is financially stable? More than one subcontractor has been forced out of business by a GC who couldn’t pay them. Subcontractors are not banks. They are businesses who have suppliers and employees to pay, equipment to maintain, taxes, fees, dues and regulations to deal with. It all costs money. Subcontractors provide all this information to a GC but, they take on the greater share of risk. The GC should also be prepared to answer all the same questions to the Subcontractor. Maybe the subcontractor doesn’t feel it can risk its business to an unstable GC. Is it reasonable for ANY business to expect to be paid in 120 days for the work they do? How about 2 years? Why do we need to go so in depth on OUR financials and other info? The last 3 years of P & L, a list of our equipment, D & B, etc. square footage of our building. Wouldn’t it be great if the Subcontractor could also see all this about the GC?

What Proves Qualification?

Looking at the questions on the prequalification forms, they are business questions and safety questions not skill questions. There may be just one question asking if the business is licensed or if they are union. Questions proving skill and capability are non-existent. Asking ‘how many years in business” does not prove skill. Skill and Craftsmanship to provide a quality product that does not fail is a measurable attribute. There seems to be no interest in how many of the people who will be working on the actual building have any skills or what level of quality their work is. These relate to the level of quality expected by the owner.  Asking how many years your accountant has worked for you does not assure there will be a skilled product delivered to the project site. Asking how often your safety director updates the safety manual used in our plant, not on the project is not going to help anyone figure out if we can do the work. There is a large sense of losing focus here.

Danger We Can’t See Coming

It would be completely naïve to out any faith in the vague reassurance that “Our people here are completely trustworthy and our system is completely secure.” Tell that one to Target. While their employees are all in line for sainthood, sadly the folks behind the scenes in the internet are not. No one should ever be sending this kind of highly sensitive info through the internet. Breaches of security are frequent enough for EVERYONE to be wary.

​To read part two of this article, please go here.