The construction industry significantly relies on beneficial relationships based on trust, cost efficiency and productivity for each party. Most of these factors are evident in the relationship between the developers, consultants, contractors, subcontractors, suppliers and manufacturers.
In order to successfully complete works of a project - from construction to completion, general contractors award work to various subcontractors. However, one of the on-going challenges is tracking the right projects and right partners to work with to avoid payment pitfalls. To avoid such challenges, we’ve put together some useful pointers to bear in mind before you bid to work on a particular project:
Understand the full scope of the project
Building a long-term relationship with the general contractor is key. Understand the past projects they’ve worked on and showcase how you can best offer your services to them. Submit a thorough bid that reflects your knowledge of the scope of work and explain your approach on the project in detail - this will reflect your trade expertise. Remember, it’s crucial to submit a thorough and final estimate along with an accurate takeoff, which is seldom communicated to a general contractor. Factor in ad hoc requests for the projects and also labour compensation
Have your performance portfolio ready to review
Typically, general contractors review a list of requirements when qualifying subcontractors to bid - from scope of work to safety plans, productivity and more. This may pose as a challenge for subcontractors to stand out from the competition. Therefore, the main goal is to build a strong relationship with the general contractor and have reference that will speak of your work. Use past projects and references that you’ve worked on to boost your potential of being invited to bid. List similar projects that you have worked on with a complete scope, man-hours, workforce, and other considerations for the project you want to bid on. For instance, Mint Creative, and Royal World Group are subcontractors that have their complete services and portfolio of projects experience listed and verified by the ProTenders platform.
Payment terms and agreement Payments is too often cited as a big challenge in construction, especially in this part of the world. Many subcontractors don’t get paid due to developers’ outstanding debts to the general contractors. To avoid that, ensure that you draw a mutual agreement on payment terms with the general contractor as they usually state the ‘pay when paid’ or ‘pay if paid’ clause which puts the subcontractor at risk. Referencing point #1 again, ensure that you’ve thoroughly done a background check of the GC and projects they have worked on in the past to give you a better understanding of their financial stability in the market.
Quality, productivity and clear communication are key
Time and efficiency is key to any contractor. Remember to deliver the best standards of your services focused on exceeding the general contractors expectations. Going above and beyond your scope of work is highly appreciated by general contractors - for the fact that they’re usually tight on budget and for any ad hoc requests, ensure that what you can do is not going to adversely affect your budgets. Quality of service, productivity and clear communication yield a good margin of repeat business for subcontractors, therefore boosting their market presence and reputation.
- Market Research
Conducting thorough market research is increasingly important in the construction industry due to the unpredictable economic trends that influence the outlook of the sector. To avoid poor decisions that can prove costly to your business, market research is crucial. Be efficient with time and use additional means to support the traditional route of approaching companies and industry colleagues. There are several options for gathering market information and identifying the right partners once a project is awarded. For example, ProTenders monitors and tracks over 59,000 projects and can connect you with the right decision-makers on the platform.