Contractor Questions: Why Is Prequalification of Bidders Important?

In 2017, one study showed that more businesses are hiring independent contractors, with a growth rate of 11%.

If you’re thinking about hiring a contractor, you should think of some contractor questions to ask during the bidding process.

But why is the prequalification process important? And what questions should you even ask? Keep reading to find out!

What Does Prequalification Do?

First, you should understand what prequalification does and why it’s important. In some cases, if a vendor has poor performance reports, those need to be documented because they could affect the vendor prequalification stage.

While there might be a lot of bidders that want the contract, a lot of them likely won’t qualify. In order to save your time and theirs, you should first determine who qualifies in order to bid.

Once you receive all of the bids, you’ll have a shorter list which will be easier to go through. This can be especially helpful if the contract is rather unusual.

However, as the owner of the project, it’ll give you an opportunity to test your market and figure out if there are enough bidders to justify the expense of the project.

The prequalification stage is different than any legal requirements that will need to hold licensure. For example, a bidder could apply for pre-qualification to bid. If approved, they can submit their bid. If they win that contract, they can still apply for licensure in order to complete the work.

Questions You Should Ask

So what are some questions to ask a general contractor for the pre-qualification stage?  There are four main parts that you should go over when asking questions.

That includes making sure that the contractor is qualified, reviewing the price, figuring out what their schedule looks like, and going over the scope of the project.

Qualifications

When asking if the contractor is qualified, you should ask questions like what they value? What qualifications do they have that make them more suitable to work on this project? You should also make notes of what you think about them.

You may also want to go over any complaints or issues they’ve had when working on other projects. What is their safety record? Do they always have injuries on the job, or do they have good statistics to back up that their employees are safe while working.

You might also want to ask them what their bonding limit is. A performance bond is an agreement with the contractor and the owner of the project that the work will be done.

Whatever their bonding limit is can tell you a lot about their reputation. If you ask, they should be able to give you a letter stating what their limit is.

Lastly, make sure that you ask them if they have any insurance. The company should have insurance in case anything does happen or the project gets ruined.

Review the Price

You should also ask them what they would charge for this particular contract. You shouldn’t always go with whoever the lowest bidder is.

Just because a contractor has a high asking price doesn’t mean that they’ll make a large profit. They may have a lot of things to pay for in order to run their business. To figure that out, ask them what they will have to purchase to complete that project.

Also, ask them how they estimate how much it will cost. What assumptions have they made about the project that would cost more money?

Figure Out Their Schedule

A lot of people decide on a contractor based on the bidder’s schedule. They may want whoever can be their first and get the job done the quickest, but this may not leave you with the highest quality of work.

Ask them how they plan to complete the work? Are they going to have to pause a different project so they can come work on yours? While this might seem flattering, they could easily do the same thing to you when another project comes along.

You should also ask questions like:

• What is their current workload look like?
• How long do they expect it to take to complete this project?
• How early can they start working on your project and why?
• Will they work overtime or on the weekends?
• What do they think could delay the project and what will they do about it?
• Will they stay until the project is completed?
• What happens if the project can’t be done due to winter weather?
• How do they schedule their projects?

Some scheduling issues might be out of their hands, but you want to make sure that you both have roughly the same schedules in mind.

Scope of the Project

Lastly, make sure you go over the scope of the project. Many contractors who are experienced will give you a more thorough and complete scope. However, these contractors are also normally more expensive.

You want to make sure that your contractor will be able to complete the requests and also have the equipment or manpower.

You might want to ask them what their intent is with the project, and why did they decide to bid on it? Are they doing anything above what you’re asking for, and why are they offering to do it?

What materials and products do they intend on using? Do they offer a warranty? Do they do their own work or hire another contractor to help them out?

Learn More About Contractor Questions

These are only a few contractor questions that you could ask, but there are many more that you should consider as well.

We know that trying to hire a contractor and run your business can be difficult, but we’re here to help you out!

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