Subcontractor prequalification
Subcontractor prequalification is the process of vetting a subcontractor's capacity, financial standing, and safety record before inviting it to bid.
Also written as prequalification, prequal, subcontractor prequal.
Last updated
Reviewed by Eric Collin · President and Founder of Firmo Construction, 20+ years in preconstruction and bid evaluation
What gets checked typically includes bonding capacity, financial statements, insurance limits, safety history including the experience modification rate, current backlog relative to capacity, and references on comparable work.
It happens before bidding rather than during comparison, and it answers a different question. Leveling asks which price is genuinely lowest. Prequalification asks which bidders should have been asked in the first place — because the lowest number is worth nothing from a subcontractor that cannot finance the work, staff it, or finish it.
Doing it up front is also what keeps the comparison honest. A bid from an unqualified contractor drags the apparent market price down and makes every other bid look expensive against a number that was never really available.
- Bid package
A bid package is the bundle of scope issued to subcontractors as a single unit for pricing, usually corresponding to one trade.
- Buyout
Buyout is the process, after a project is won, of converting each estimated scope into a signed subcontract at an agreed price.
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