POWER June 2021 - 27

PROJECT MANAGEMENT
projects, a subcontractor's fluency with
project management software-including
their willingness and ability to train all team
members on the software (Figure 2)-can
be a differentiator.
While automated data collection and
information delivery can be cost-effective
and convenient, general contractors
will have the best results if they follow
up using person-to-person interactions
when helping
subcontractors through
the prequalification process. For example,
the general contractor can offer
in-person meetings, develop meaningful
relationships prior to a bid event, create
(and maintain) a feedback loop for
subcontractors, and explicitly express
appreciation for the subcontractor's participation.
By supporting the efforts of
potential subcontractors and answering
questions in a timely manner, general
contractors can begin building a positive
working relationship with future subcontractors.
When seeking subcontractors
in new markets or regions, face-to-face
meetings can be particularly beneficial.
Prequalification is a multi-step process,
so ample time should be allowed
for its completion. Collecting and reviewing
information early-not immediately
before
accepting
bids-can
improve
subcontractor responsiveness, translating
to better project outcomes. This is
especially true when subcontractors are
not experienced with prequalification
procedures; when this is the case, the
general contractor may need to devote
time to educating potential applicants.
Prequalification Improves Safety
Performance and Increases Cultural
Alignment
According to the National Safety Council
(NSC) Congress and Expo, prequalification
processes helped drive safety performance
for contractors and vendors.
In partnership with Browz, a provider of
prequalification solutions, NSC analyzed
a database of 17,000 suppliers. Metrics
included TRIR (Total Recordable Incident
Rate), DART (Days Away, Restricted, or
Transferred) rate, and LWR (Lost Workday
Rate). Research results indicated
that when contractors and vendors participate
in third-party prequalification,
they tend to have better performance
across these traditional safety statistics,
compared to national averages. Specifically,
TRIR, DART rate, and LWR were
34%, 48%, and 65% better, respectively,
than national intra-industry averages.
Subcontractor prequalification is not
just about data gathering, nor is it about
June 2021 | POWER
2. Having properly trained people capable of
utilizing the latest technology to its fullest extent
is vital to project success. Courtesy: Graycor
finding the company with the lowestpriced
proposal. Going beyond the numbers
is the only way to ensure that a
subcontractor aligns with the general
contractor's values and is truly a good fit.
General contractors who have thorough
prequalification routines are in the best
position to improve project outcomes-a
win not only for the construction company
itself, but for the entire team, including
the project owner.
Many power industry owners are
challenged with increasing levels of
spending when it comes to diverse, minority,
disadvantaged, and local firms.
Reaching out to these firms during a
bid event can be challenging. To be better
prepared, general contractors can be
proactive, identifying contractors, suppliers,
and vendors that meet requirements
in different trades. Developing
an outreach and engagement program
is critical to gaining an understanding of
subcontractors' capabilities, as well as
to developing relationships.
General contractors should seek to establish
a network of subcontractors who
have similar views on risk, including risk tolerance
and commitment to risk mitigation.
While ideally every subcontractor achieving
" prequalified " status would be completely
free of any trouble spots on their
qualification, this is not always realistic.
Putting issues in context is important. For
example, when it comes to a company's
safety record, some incidents will have
greater relevance and significance than
others, so the general contractor should
examine the specific cases surrounding
any incidents and should consider them in
the context of trade-wide trends.
Many concerns can be addressed by
the general contractor in a risk mitigation
plan. By prequalifying contractors, general
contractors can reduce the inherent
risks of working with a new contractor,
ensure safety and quality, minimize disruptions,
and increase the probability of
successful project outcomes. For exwww.powermag.com
ample,
if a subcontractor is a good fit in
terms of expertise or company culture,
but has safety incidents on their record,
the general contractor may elect to put
extra stipulations in the contract that
ensure adequate safety measures are
taken. A general contractor should have
a clear review process in place for considering
and approving exceptions to
their prequalification standards. It may
also be necessary for the general contractor
to devote additional manpower to
managing known risks associated with a
given subcontractor. Furthermore, it is a
good idea for general contractors to have
risk mitigation plans in place even when
a subcontractor appears low risk. This is
particularly true for trades that are generally
considered high-risk and for trades in
new geographic regions or markets.
Another way in which prequalification
achieves cost savings-and thereby delivers
better outcomes for the entire project
team, including owners-is that the process
helps general contractors and owners
assess interest in a given project early
on. If there is little interest, adjustments
may need to be made to make the project
more attractive to prospective bidders. An
additional owner benefit to working with
a general contractor who has a proven
prequalification process is it can help weed
out potential subcontractors who are not
qualified or who do not have the right skill
set. Ultimately, prequalification processes
increase the likelihood of getting the best
contractors in terms of performance, safety,
and quality-at the right price.
Like other aspects of preconstruction,
prequalification is not a one-time
effort but requires ongoing management
and improvement. General contractors
should review their processes, procedures,
and qualifications annually, if not
more often. Similarly, any subcontractor
database maintained by the general contractor
should be regularly updated.
Power industry project teams have
become increasingly committed to preconstruction
processes as part of capital
construction. To date this has meant having
a strong focus on compelling new
products or procedures such as computer
modeling, forecasting, and virtual design.
But other key aspects of preconstruction,
such as subcontractor prequalification, are
now having their importance recognized,
and this is leading to enhanced risk mitigation,
improved working relationships,
and ultimately, better project outcomes. ■
-Aman Singh is manager of
Preconstruction Services with
Graycor Southern Inc.
27
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POWER June 2021

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