A recent article in ENR, “Contracting – Sub Prequalification is Tougher but Needed More”, got me to thinking about the current approach to vetting (sub) contractors. And when I couple that with the comments coming out of the International Risk Management Institute’s construction conference held in San Diego last November – paraphrased as “…during this recession, smaller construction firms are going out of business and surety losses are growing”, I ask, where is this going? I see it going towards an increase in the potential for (sub) contractor default.

Yes, that potential has always been there, but maybe today it’s on the rise? (Sub) Contractor vetting should be one of the pillars of large-project risk management processes. But is it really done with sufficient rigor? Is it a formalized process that defines up-front requirements as they potentially impact project risk, or failure? Is it done in a manner that relates to the job at hand and not just based on generics, past history or luck?

Does the vetting process force attention on how the bidders plan to approach the specific job at hand, provide the resources for that particular job, and be a part of that specific team? Price should not be the only criteria.

I have vetted hundreds of contractors for lots of projects over many, many years. What I have found is that frequently they are not prepared for the rigor that should be applied, because it was not applied in the past. What’s your take on this? Let’s hear from some of you?

Peter Hessler

President

Construction Business Associates, LLC

PGHessler@ConstrBiz.com