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Contractor Prequalification Forms – Benefits & Drawbacks & Free Download

When staffing capital construction projects, it’s critical to hire contractors who have the experience, capabilities, staff, and availability to complete work safely and at the quality level you expect.

Insight into a contractor’s capabilities and past performance become even more critical on large projects. Safety incidents or contractor defaults expose owners and builders to expensive claims. They may also introduce new layers of interdependent safety, financial, and quality risks that can derail project timelines and erase profit margins.  

That’s why hiring partners often develop a prequalification process for evaluating contractors. The process typically involves collecting a large amount of information about the contractor’s past performance using a prequalification form.

Free Download: Contractor Prequalification Checklist

Here we cover the pros and cons of using a prequalification checklist. We also introduce an alternative approach, Partner Elevation. Read on to learn about the following:

Table of Contents

What is a Contractor Prequalification Form?

The traditional approach to risk management is perfunctory prequalification. This static assessment considers a contractor’s risk based on lagging risk indicators, collected through a contractor prequalification form during the bid phase.

However, this type of prequalification provides a false sense of security because it looks in the rear-view mirror. Prequalification fails to differentiate between truly great partners and those who are simply lucky.

When Contractor Prequalification Falls Short

A small business’s financial viability can change rapidly as they take on larger projects. One job may be all it takes to create an undue situation. Relying solely on historical data–such as Experience Modification Rating (EMR) and Days Away, Restricted Duty, or Job Transfer (DART) Case Rates–penalizes small partners because they can’t absorb a single adverse event. To truly assess a contractor’s risk profile, hiring partners need dynamic insight into their partners’ capacity at each project phase.

Even if they effectively assess partners upfront, the decision to hire them is often based on other factors. Work may not be awarded to the safest partner, but to the one with the lowest bid, the right capabilities, specific availability, or a relationship with the hiring company. 

The end result of the prequalification model is a lot of going through the motions without actually mitigating your risk.

Partner Elevation: A Shift from Contractor Prequalification

Partner Elevation is a new movement among leading construction firms and asset owners. Its core tenet is that the path to success is to actively collaborate with contracting partners to boost their capabilities for delivering great work. 

It’s a fundamental shift in mindset — from up-front screening to collaborative, dynamic mitigation of risk.

THEN

Contractor Qualification
Assume upfront vetting alone will mitigate the safety, financial, quality, and sustainability risks that make or break projects

NOW

Partner Elevation
Dynamically collaborate with partners — before, during, and after projects — to mitigate risks and ensure greater outcomes

Partner Elevation allows organizations to meet any partner wherever they are in their risk-mitigation journey and elevate them to do better work.

This happens when organizations:

  1. Engage the highest-potential partners and chart a path to shared success

  2. Collaborate with partners on the job to dynamically mitigate new and evolving risks.

  3. Review project and partner performance together to continuously learn and improve.

Instead of using typical contractor prequalification forms, builders need to create a full, 360-degree assessment of risk indicators that show both the past performance and the future potential a contractor brings with them on a project. There is still a lot of contractor data to collect; the difference is that this data is used to develop a complete picture of a contractor’s capabilities instead of facilitating a binary “yes” or “no” hiring decision.

Checklists: Contractor Information to Collect for Partner Elevation

Partner Elevation requires gathering a lot of information from contracting partners who might not have the same compliance and administrative resources as your firm. This can quickly get out of control if not properly managed. 

In your earliest communications with potential partners, (especially on your website), articulate your vision for risk mitigation. Contracting partners and their employees want to work for hiring partners who care about their safety and their livelihood. Remind them that delivering your vision requires their full engagement. 

Precede any enrollment process with an email, explaining the information that will be gathered and outlining the benefits of this process to your partner. 

First, ask your contracting partners to complete a basic profile questionnaire on your website to gather this information:

  • Trades / Divisions

  • Specialties within each trade

  • Project types (e.g. new build, renovation)

  • Industry experience (e.g. pharmaceuticals)

  • Service area

  • Largest projects completed

  • Disadvantaged business entity status

  • Key contacts by role

Then, use these checklists to help contracting partners gather the safety and financial information they need to demonstrate their lagging risk indicators to submit their bid. These checklists are similar to the contractor prequalification checklist that hiring partners used before transitioning to Partner Elevation.

Sample Safety Prequalification Form:

Information to Be Collected and the Benefits of Including It

Information to
Be Collected

Benefits of Including Information

Historical Safety Performance:

  • OSHA 300A

  • Incident Rates (TRIR, DART, LTIR)

  • Experience Modification Rate (EMR)

  • Regulatory Experience (OSHA)

Benefit

Providing a snapshot of the potential partner’s historic safety performance helps you understand their risk mitigation journey. Gain insight without placing an additional burden on the contractor. This information affords other contractors the opportunity to showcase their past efforts against their peers. 

Historical Safety Performance:

  • Safety and Health Programs

  • Quality Management Systems

  • Documented Safe Work Practices (JSAs, JHAs, AHAs)

Benefit

Develop a better understanding of a potential partner’s sophistication and ability to perform work to your expectations. This provides the contractor the opportunity to show they are best-in-class by investing in these programs and practices.

Sample Finance Prequalification Form:

Information to Be Collected and the Benefits of Including It

Information to
Be Collected

Benefits of Including Information

Company Experience:

  • Project References

  • Current Backlog

  • Work in Progress (WIP)

  • Ideal Contract Size

Benefit

Provides you with insight into the contractor’s capacity to complete the scope of work successfully. This helps identify potential risks that result from overstretched or overcommitted contracting partners.

Company Viability:

  • Financial Statements

  • Surety Information

  • Sample Certificate of Insurance

  • DBE Certification

Benefit

Determine upfront if the potential partner has the capacity to meet project-specific surety or insurance requirements. This information also helps you fulfill your project DBE requirements.

Company Resources:

  • Labor Force Information

  • List of Owned Assets

  • Applicable Business Licenses

Benefit

Decide if the work is going to be performed by this contracting partner or if they will need to utilize lower-tier contractors, which can increase your risk exposure. Additionally, this ensures the potential partner meets the legal requirements for the project.

Safety and finance aren’t the only areas to uncover lagging risk indicators. Hiring partners can use end-of-project performance evaluations to capture quality-related metrics, such as total days of rework. The total days of rework required creates aggregated data over multiple projects that you can use to calculate an ‘Average Days of Rework per Project’ metric. 

Best Practices for Collecting Contracting Partner Information:

Without a dedicated management system, hiring partners must manually input the incident and financial data into spreadsheets to calculate the contractor’s incident rate. If the hiring partner keeps thorough records of these calculations, they can compare partners’ rates.

To benchmark potential partners against the industry average for their trade, hiring partners will need to look up the Bureau of Labor Statistics industry averages for incidents and manually compare their contractors against the established industry average.

Remember, this is an assessment exercise, not a prequalification activity. Relying
on lagging indicators alone, especially without context, can unfairly penalize smaller
contracting partners who can’t absorb an adverse event due to their low number of
work hours.

That’s why hiring partners also need to collect and review leading risk indicators. These leading indicators demonstrate a contracting partner’s commitment to improving their performance and delivering safe, high-quality work.

Overall, these indicators can be grouped into the following three categories:

Leading Indicator Category

Example

Foundational Documents

  • Safety Management Program

  • Contractor Debt-to-equity Ratio

  • Construction Environmental Management Plan (CEMP)

Management Systems and Processes

  • Safety Management System

  • Safety Standalone Elements

  • Quality Program Elements

Operational Indicators

  • Closure of Corrective Actions

  • Supply Chain and Procurement Processes

  • Current Backlog

Any hiring partner that works with (or assesses) more than 100 contracting partners should develop a structured approach to scoring each partner across risk factors. A well-balanced scoring and assessment method considers lagging and leading indicators, with each individual indicator assigned a weighting based on its relative importance. The final output creates a comprehensive risk score for each potential contracting partner. This objective approach to assessment will allow you to compare “apples to apples” as you assess partners, as opposed to prequalification and contractor checklists.

  • Read the 2023 Contractor Prequalification Guide – For years, contractor prequalification has been the gold standard in assessing a contracting partner’s financial health, safety record, and capacity to perform the needed work. But that is starting to change. Read more about process misconceptions.

  • Download the Practitioner’s Guide to Partner Elevation – Learn how the most successful builders and operators collaborate with partners to dynamically mitigate risk. This step-by-step guide walks you through the framework leading organizations use to succeed in this labor-constrained market.
  • See the Partner Elevation Platform in action – Highwire is committed to driving the Partner Elevation movement and elevating the industry. Our platform powers $35 billion of combined assets and projects with contracting partners in 62 countries. Schedule a demo to begin your journey towards competitive advantage through Partner Elevation.

Avatar photo
David Tibbetts

David Tibbetts is the Chief Safety Officer at Highwire. Prior to joining Highwire David managed the Construction Safety Program at Harvard University overseeing the implementation of the University's Construction EH&S Standard, Substance Abuse Prevention Program, and use of Highwire's Contractor Safety Assessment Program.

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