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Fix The Prequalification Process (Pt 2)

9/29/2016

3 Comments

 
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Contributed by Margaret Fisher
Submitted Title 'Waaaaay Too Much Information!'
To read part one of this article, please go here.
Time is Neither Unlimited Nor Elastic

As the company I work for gets invited to bid on projects around the country by over 560 GC’s, I see a lot of these.  As you might imagine, these forms ask a lot of the same questions. In today’s world of “every second counts” and lean measures, I am all about eliminating redundancies. So about 5 years ago, I started collecting the questions being asked on these forms and compiled ONE big “Standard Pre-Qual Info” document. Today, there are about 200 questions on it. I keep that updated quarterly and when we get a request to complete yet another pre-qual form, I send this instead and tell them our president will make an appointment with their financial person to review OUR financial info in a closed door, one-on-one meeting. We do not leave the financials behind. We are not alone in this practice. In 99% of those cases, they never bother to set up this appointment. And 99% of the GC’s I send this to say I’m not alone and that works just fine. It’s the ones that insist on online completion because of some kind of (meaningless) score that gets computed that insist on this. The info is not better it just eats up a ton of time. Time one could use doing some actual work that would be beneficial to the quality completion of a project. What happens if we don’t fill them in? We get the job anyways.

Testing This Out

So let’s build this common scenario. Say a typical project is going to require the work of 15 trades. 1 x 15 = 15. Each CSI Section is bid by a minimum of 3 subcontractors, but could be bid by 8-10 or more. So, let’s say 5 for each trade. 5 x 15 = 60. Each prequal form is 10 pages minimum. 60 x 10 = 600 pages of pre-qual info to review.  Whew! That’s a lot to analyze. So I asked a great CSI, AIA brilliant friend of mine to lunch one day to discuss this phenomenon.  He does get involved in the subcontractor selection process and is very keen to have high quality skilled individuals on his projects. I asked him how he has time to read 600 pages of all this info that 60 subcontractors submitted. He says he gets the info but doesn’t read them. I asked, “How much of this info is used to make the selection of the subcontractor?” He said, “None of it.” I needed a moment to let that sink in.  This is staggering because we’re talking about 60 companies wasting 10 hours apiece on something that isn’t used. (And people wonder why productivity is so low. Probably partly because of the lure of social media, etc. but, also because of irrelevant activities like this.) So I asked, If the GC is insisting on this and if it isn’t used, what DO you use to make the decision instead? He said, he does what everyone else does; look at the prices, remove the proposals that are not realistic, see who’s including the most scope, think about who they used recently, thought about how the project went and chose the one they liked working with.” All these business questions don’t help him decide who works on his projects.

So Who Cares?

After a delightful lunch, I dropped him back at his office and we went our separate ways but, I had to ponder the remaining question. What is actually NEEDED to determine which subcontractor is right for the job? You would have to have qualification questions about the tradesmen skill itself on the questionnaire. This has not happened. I then went to the office of the Executive Vice-President of a large trade organization that is baffled by this whole thing as well. After about 2 hours of discussion we came to this: Get a room full of the estimators of all the GC’s in the area in one room and give them a single sheet of paper and a pencil. Tell them they have to determine which of 5 Subcontractors in one trade will be given a contract for that trade. They can only ask ONE question. What would the ONE question be? What is the info that assures them the subcontractor has the skills to do the job as specified? I think if you took the top 5 answers they come up with, you’d have the makings of a new pre-qual form that works.
​And the Answer IS

Yes, you can easily make the argument that these forms do more than collect business info about a company. They prove someone at the company knows how to read and follow directions, it proves they have an idea what business practices are, it may even show their literacy, timeliness and responsibility. All a matter of interpretation, of course. Are they needed at all? Probably. Is ALL this needed? No.

If You’re Going to Dream, Dream BIG!

The time is going to come when no one is going to sit still for this nonsense and will want to provide the meat of the matter; that which is truly useful to determine who can get the job done at the skill level required in a professional manner in a very simple, non-invasive way that makes it possible to protect those attempting to help get it done. I have not found a single person, GC, Tradesperson or design professional alike who doesn’t agree that it’s high time we get this back under control. It’s not really working. So why do we keep doing it?!?

All Are Invited

It’s time for GC’s, Design Professionals and Trades Professionals to reach for something more meaningful and relevant. A cross collaboration of construction practitioners who are living in the real world can figure out something simple that can be accomplished on one page, in 10 minutes, not 10 hours that actually relates to the question, “Who should do the work on this project?” Some GC’s estimators have shared with me that they get all this info and they still do not know who to award a project to! That reveals the actual problem. If all that doesn’t bring them to an obvious answer, they probably are not asking the right questions. Garbage in-garbage out. Ask better questions and you’ll get better answers. GC’s are wasting a lot of peoples time asking for into it doesn’t need, probably won’t use, that doesn’t do the job and in some cases, shouldn’t even be asking. And I would end with this. It won’t come in the form of a single score.
3 Comments
Mike Hill link
9/30/2016 09:27:52 am

Margaret, thanks for putting this miserable time wasting exercise in perspective. So much for productivity in construction! And so many don't even use the info they collect! We thought that might be going on!

As a bond agent, it occurred to me there's a potential answer to your note, "What would the ONE question be?"

Answer, "Can you provide a bid bond?" If they can, their surety has already done a whole lot of that qualification work, and if they don't qualify, they won't get the bid bond.

I expect many of your 560 GCs are also SDI (sub default insurance) users. While it only takes us a few minutes for each one clients need, we share a bit of your pain when we have to provide the surety letters requested on many GCs' forms. That letter gives the GC and their SDI company some measure of comfort, even though the standard letters have disclaimer language in them. And, of course, it can save the GC from doing some of the homework the surety has to do to bond a contractor, and the GC doesn't have to pay for it. But it’s likely their SDI policy requires it. Wonder why??

If the GC does ask for a Bid Bond, then checks to see if it's from a T-Listed, viable surety, then selects the contractor who provided it, and pays for Performance and Payment Bonds, they'll have a qualified sub. And yes, the surety industry is already working on ways to speed up the claims process when a GC thinks they need to dump a sub. But it won't happen without making sure the GC is doing what they're obligated to do. Just trying to be fair to all players when problems come up.

I appreciate your valuable work in this. More people need to know about this waste of resources!

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