Editor’s Note: This topic is important to all our contractor readers. The piece originally appeared on CMD’s Construction Direct. Edited it for space considerations.
General contractors and subcontractors are facing a mixed bag these days. On the one hand, they’re experiencing strong, even record demand with backlogs averaging over nine months. But the volatile nature of rising material prices, fueled by tariffs and trade tensions, has dampened some of this enthusiasm.
Add in a nagging labor shortage, and you’ve got a recipe for a stretched thin construction industry. Sure, working lean can reduce expenses, but it can also cause unexpected delays when trade subcontractors run low on experienced workers and projects come to a screeching halt.
All of this begs the question: how can a subcontractor of any trade—utility, walls and ceilings or concrete—position themselves when it comes down to not just being the lowest bidder, but the best bidder? Beyond the win, what needs to happen so they can win repeat business from a GC? No subcontractor wants to be viewed as a GC’s worst nightmare because they failed to deliver the work or information was miscommunicated. All of these answers are critical when the price isn’t the only determining factor in a winning bid.
Making the Shortlist with Financial Stability Responsiveness, a positive attitude, and a sense of teamwork are all traits a GC appreciates when they turn to subcontractors for their trade expertise. GCs will also look at past performance, financials, equipment, safety, comparable projects, and project cost and payment terms.
Subcontractors should keep in mind that GCs are seeking stability since subcontractors must incur much of the cost, reimbursed later. When it comes to fronting millions of dollars in expenses and labor costs, cash flow issues can have a life-or-death impact on subcontractors and negatively impact project completion. Subs showing the GC they can incur these costs are a big part of this process.
Understanding Project Scope
Building a long-term relationship with a GC is an ongoing process. One way to accomplish this is by submitting a final bid that reflects a thorough knowledge of project scope. Describing a project in detail and explaining their approach can help a subcontractor showcase their knowledge and trade specialty. It’s crucial their final estimate provides a level of detail to a GC, something not often communicated. For example, a subcontractor could build trust by providing a color coded digital quantity takeoff.
When a subcontractor can itemize scope and quickly present varying price scenarios, it will further demonstrate their understanding of the project. The most efficient way to handle ad hoc requests on a project is by leveraging automation that separates the bid into areas and phases. By using dynamic reporting, a subcontractor can show bid detail and summary by selected area so they can respond quickly and accurately to the GC.
As noted, general contractors review a whole range of issues when qualifying subcontractors—from their safety plans to their available equipment, including their ability to maintain and fuel that equipment. It may seem difficult for a subcontractor to stand out from the pack if they’re busy checking all the boxes.
Of course, the goal for any subcontractor is to build strong relationships with GCs so they can reap the rewards of repeat business. One way to get on this path is by using past projects and references to their maximum impact in the qualifying process.
Typically, subcontractors will be required to reference similar projects, in size and scope. Subcontractors should list similar projects completed with scope, schedule, budget, man-hours worked, and any special considerations that were part of the project.
When it comes to references, subcontractors should include references they know will be willing to speak in-depth about their performance. They should also be sure to include the contact’s role and pertinent project details.
Remember, once they win the bid, subcontractors who know they are auditioning for their next job will likely find more success. For most subcontractors, the goal is to position themselves as an asset to the general contractor to ensure a healthy project backlog. By establishing their value post-bid, they can elevate themselves in the eyes of any general contractor.
By Conley Smith, For Construction Connect-CMD