E481: Ask Coach – Finding Qualified Subcontractors

Sourcing qualified subcontractors is one of the biggest challenges when entering new markets.


Q: Can you give me some ideas on ways to find qualified subcontractors when entering a new market area?

A: There isn’t an easy way. You just have to search for them.


  1. No easy way – just search for them
    1. Search directories like The Blue Book and Yellow Pages
    2. Post your opportunity on job boards and lead services like Bid Clerk
    3. The problem with these is there is no way of knowing if the contractor qualifies
      1. Soon we will have a solution to this problem with Builders Grid – a construction procurement solution that I have been working on and is doing a pilot launch in Michigan
  2. Extend your reach to find more options
    1. Call local rental companies or equipment companies
    2. Call local suppliers
    3. Talk with local business people
  3. Pre-qualify with a short questionnaire
    1. Create a 1 to 2-page qualification application to sort contractors out
    2. Include an outline of the requirements you are looking for
    3. Make sure potential subs complete this information before spending time with them
      1. If they are not willing to complete the app then do you think they will have time for you during the project?

E378: Managing Subcontractor Payments

Keep control of your projects and cash flow with proper subcontractor payment management.


  1. Avoid the common pitfalls
    1. Don’t rob Peter to pay Paul – pay all bills associated with a project draw when you get paid
    2. Over-payment on work performed
    3. Sub-tier sub and supplier non-payment – collect lien releases
  2. Setting up for success
    1. Every sub must have a subcontract agreement
    2. Make subs create a schedule of values and review it
      1. Match to Owner SOV if possible
    3. Clearly outline your billing procedures
  3. Making it work for everyone
    1. Communication is a key
      1. Make sure everyone understands how you manage payables
    2. Review the SOVs when progress payments are submitted – don’t wait
    3. Pay quickly when you get your money
      1. I prepare everything prior to receiving payment so I can push a button once the money is in my account

E281: Ask Coach – Subcontractor Prequalification

Subcontractor prequalification is a must. To what extent, depends on your projects.

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E158: The Right Subcontractors

“Finding the right subcontractors protects us from unwanted struggles down the road.”

How do you pre-qualify your subcontractors?

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