Pre-Qualification

Large general contractors screen subs and suppliers before allowing them to bid on their projects. This is called pre-qualification. By pre-qualifying they greatly increase the odds that they will retain a vendor who performs quickly and successfully. While there is some variation in requirements, most of the generals are really looking for pretty much the same thing. Financial stability, Good bonding company, Good safety record, Experience, and a match with the work and size of the firm. This pre-qualification screening is really the big generals secret to success. By successfully screening their vendors they eliminate many management and scheduling problems.

In outline form here are the typical pre-qualification requirements:

Company Information - Looking for long term and stability
· Owners and form of organization
· History of the company
· MWDBE status
· Work locations
· Type of work

Financial Information - Looking for solvency and cash flow
· Current ratio larger than 1.25
· Leverage factor at 2.5 or lower
· Working capital > 10% of contract
· Positive net worth
· Contract value less than 20% annual volume

Bonding Information - Looking for a solvent bonding company approved by the State
· Bonding - AM Best rating and California admitted
· Capacity compared to work under bond

Insurance Requirements - Looking for range of coverages
· California listed
· General Liability - Per Occurrence and minimum limits
· Auto Liability
· Excess/Umbrella Coverage
· Worker's comp.

Safety Information - An accident costs everyone on the project - looking for good practices and good record
· Safety plan
· Programs in place
· Training records
· Experience modification
· Violation history
· OSHA 200-300 logs

Company Experience - Looking for successful similar projects
· Type of Work
· Contract volume
· References
· Similar projects in last few years

A tough list? Yes, but don't give up if you don't meet every criteria. There are numerous exceptions made every day. Put together a resume of your company addressing the above items and go and see some purchasing managers. This business is about personal relationships. Ask for work and ask what you need to do to get it. Ask to be allowed to bid on a small "starter" contract. You will be surprised at how often rules are bent for people who are eager and enthusiastic about working with a large general.