Revenue from the U.S. construction industry surpassed $2 trillion in one year alone. This figure might seem surprising, but if you start paying attention, you might notice that cranes, scaffolds, and new construction are practically ubiquitous. The construction industry relies on many moving parts to generate this revenue, but it could be argued that subcontractors are the backbone of the industry. A subcontractor is a worker who is hired by the primary contractor of a project and typically carries out the general labor required to complete a project. Read on if you manage a construction company and you’re wondering how to find a subcontractor.
Establishing Requirements
What makes a good subcontractor? In order to find the right personnel for the job, you need to answer this question and develop a clear list of criteria that all potential candidates must meet. Some companies call this the prequalification phase, and it typically includes interviews, a review of candidates’ work history, an investigation of any OSHA citations, and other important considerations. If a subcontractor meets all requirements, they may be allowed to proceed and bid on the project.
Bidding for Contracts
At the bid stage, subcontractors should be informed of the project’s safety requirements as well as any other restrictions that might impact their bid. Subcontractors’ bids should outline all staff requirements for safety management as well as costs associated with orientation and safety training. If permits and certifications will incur additional costs, this should also be included in the bid. Money isn’t the only factor that must be fleshed out, though. Safety-related plans and meeting requirements are also a standard disclosure in a subcontractor bid.
Evaluating Bids
With a selection of bids to choose from, construction companies should review each one and determine which one meets the requirements best. In addition to reviewing each bid’s budget, its safety details should be reviewed and stringently critiqued. All of the proposals contained in the bid should be compatible with your construction insurance, too, including any requirements for minimum staffing or safety training. If you aren’t sure what your construction insurance stipulates, check with your insurer.
Awarding Contracts
After reviewing your insurer’s requirements and comparing them to your prospective subcontractors’ bids, you should have all the information you need to make a decision. At this point, you can award the contract to the bidder who best meets your needs. Remember that safety is typically a more reliable predictor of success than budget. If you receive a bid with a thoroughly outlined safety plan, this level of precaution can minimize the liabilities of your worksite, which is worth far more than a bid that’s slightly lower. Be sure that the contract includes the safety guidelines included in the bid.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278
