John Donne said, “No man is an island.” The same can be said for construction firms. Today’s general contractor requires a vast network of subcontractors and suppliers to deliver projects on time and within budget. But contracting with these vendors brings additional risk as GCs are ultimately accountable for all project operations, whether they’re performed by their own employees or vendors. This risk includes supply chain interruptions, safety violations, quality of work, project delays and licensing issues, just to name a few. Meanwhile, choosing the right vendor can ease some of the heavy lifting and accelerate projects at the same time. To help you in your search, here are 17 tips for choosing construction suppliers and subcontractors you can trust.
Can they do what you need them to do at the quality you require? Look at their previous work for examples.
How many years have they been in business? New businesses is not an eliminating factor, but long standing companies are more consistent.
The business may be new, but the owner/foreman may have been operating for 30 years or more. They’re running the job, so their experience is critical.
What are their TRIR, EMR, LTIR safety ratings? Have they had any regulatory notices of violations? Do they have an active safety program that includes documented training and a safety policies and procedures manual? Do any employees have OSHA 30 cards, or at least the foreman? Do they have procedure for reporting accidents? And do they have a list of employees that are competent in the tasks they will be performing?
Required Licenses and Insurance
Do they have a business license and all required insurance? Insurances may include general liability, workman’s comp, auto, errors and omissions, pollution and, for architects and engineers, professional liability insurance. Remember, the GC is responsible for these in the eyes of the government so unlicensed or uninsured vendors should be cut from your list.
You need to know they can fulfill orders quickly and keep projects moving.
Everyone has a friend who will offer a fantastic review. Dig deeper to find an actual customer who can give you a genuine assessment.
Vetting vendors is a lot like hiring employees. The company that is slow to respond and doesn’t take time to check their work is likely to act the same way on your job site.
Flexibility in Manpower
Can they ramp up or down as your needs change?
Prevailing Wage Jobs
Do they understand the requirements and have they done them before?
Some public projects require women-, minority- or veteran-owned businesses. While this is not required, it’s nice to have at least a few on your vendor roster.
Breadth of Skills
Can they handle different types of work? Hiring one supplier or subcontractor in place of many saves you time before and after every project.
Vendors of Vendors Screening and Requirements
While your immediate vendor may fill all your requirements, you also need to stipulate that their vendors do the same. Subcontractors of subcontractors are still your responsibility.
Do they use email and digital images for documentation? Can they receive plans and documents via email? Do they use video to report progress and issues? Tech savvy vendors can make your job easier, which is exactly they’re supposed to do.
Site Specific Requirements
This may include badging for government sites, union cards, drug and alcohol testing.
This should be your last consideration, but a consideration nonetheless. If pricing is beyond your budget, then nothing else matters. At the same time, you should never choose price over qualifications. Remember, you are the one at risk, even when the vendors is at fault.
Supply chain management qualifying services, such as Avetta or ISN, can help ease the burden of vetting vendors. They should confirm vendors have all required insurance, licenses, safety records and other documentation to help limit your risk while doing business. They annually recheck safety performance ratings and insurance to confirm they are satisfactory and up to date.
Yes, this list is long and requires a significant investment of time. But consider for a moment the cost of choosing a supplier or subcontractor that puts your project and construction company at risk. Isn’t it better to invest the time up front than pay fines in the end?