The purpose of a prequalification process is to evaluate whether a contractor is qualified to bid on a specific construction project. However, the bidding landscape was drastically altered by COVID-19, so it is increasingly important to strategically reposition the way you present your company.
This new environment has necessitated changes in a contractor’s overall approach to landing new work, but it’s most evident in the pre-qualification process where a company needs to stand out from the crowd and improve its chances of success.
Standing Out from the Competition
There are many ways to stand out, including:
Experience – Customize the bid to highlight the unique trade, type of work (public/private), market sectors and other experience the company has that would be relevant to the job being bid on. In this regard, a contractor’s creative ability to present itself in a specific light can significantly affect its ability to land that next job.
Past Performance – Quantify your performance record of coming in on time and within budget on past jobs. Consider including cost performance reports, customer testimonials, quality reviews, and other documentation that support your promises of efficient, high-quality service. With today’s projects being much more budget focused and driven by a fast-paced schedule, a contractor’s historical performance to adhere to both of these items becomes much more important in the decision making process.
Safety Record – Go beyond the basic safety record that is required in the bid and demonstrate your overall commitment to safety. Outline the safety training, compliance programs, technology and other tools your company employs to create a safe jobsite, avoid project delays and protect the customer from financial and reputational risk.
Technology – In an industry that is slow to adopt new technologies, your investment in safety technology, digital financial tools, data analytics and artificial intelligence will go a long way in differentiating your company from the rest. Explain how these technologies allow your company to increase efficiencies, avoid project delays, make the billing process easier on the customer's staff and provide other benefits to improve their overall ROI.
Financial Capability – Your bid should paint a clear picture of your company's financial solvency, both now and in the future. Include details on credit lines, cash flow projections, relationships with lenders and other advisors, top-line revenues and audited financial statements. Savvy customers, in both public and private sectors, know that lending restrictions, delayed payments and economic damages are plaguing the construction industry today.
Payment History – Emphasizing your strong history of on-time payments to your sub-contractors and vendors will further demonstrate your financial capability and put the customer’s mind at ease that project delays will not be caused by delinquent payments or liens. Contractors should be ready with rreferences as well.
Compliance with Contracts – Particularly if you are bidding on a contract with government agency-specific requirements, highlight your past compliance with MBE/WBE or other hiring obligations.
While these extra steps may put an additional responsibility on your already-strained project team as they recover from COVID-19 delays and damages, the benefits and ROI will position your company for long-term financial stability and success. Plan ahead and be sure to lean on the experience of your CPA, surety and other advisors to help you create the pre-qualification process that works best for your company and enables your bid to truly stand out.