Use ASA’s Prime Contractor Factor when considering whether to bid on or sign a subcontract for a construction project
It’s easy to focus on just the costs of internal factors that you control, but remember that external factors contribute to the success or failure of the project. Your customers’ decisions and work relationships can make or break a project for you.
The external factors may seem harder to judge, but a good Customer Evaluation Program will yield important information that you would not otherwise have. Take the time to ask questions such as:
- Does the prime contractor seek bonding through reputable sureties?
- Does the owner or prime contractor have the financial capacity for the project?
- What is the prime contractor’s record on bid shopping?
- Is the prime contractor willing to negotiate contract terms that you view as unbalanced?
- Do the prime contractor’s field personnel provide regular updates on project progress?
The answers to these and potentially hundreds of other questions will help you rate the factors that you will consider in deciding whether or not to take work. Some factors will weigh heavier than others. Perhaps for your company, the experience of the prime contractor in performing the type of project will count more than whether he holds pre-bid conferences.
Once you have worked out the factors that you will consider and the factors’ relative weights, it’s simple to draw up a chart to calculate the overall “score” of the customer. ASA’s white paper on The Prime Contractor Factor, which is free to ASA members, provides a guide on how an individual subcontractor can set up his own prime contractor evaluation program.
