Subcontractor Prequalification Procedure
Document Type: Procedure
Version: 1.0
Last Updated: February 2026
Distribute To: Project Managers, Estimating, Operations
Purpose
Establish a process for evaluating and qualifying subcontractors before bidding or awarding contracts to ensure they can successfully perform the work.
Why Prequalification Matters
- Reduces risk of sub default
- Ensures quality work
- Protects safety record
- Verifies financial stability
- Confirms insurance/bonding capacity
- Documents due diligence
When Prequalification is Required
Always Prequalify:
- New subcontractors (no prior relationship)
- Subcontracts over $50,000
- Critical path work
- Specialty or complex work
- High-risk activities
May Use Simplified Process:
- Existing approved subs (update annually)
- Small subcontracts (< $50,000)
- Non-critical work
Prequalification Criteria
Financial Stability
| Criteria | Minimum Requirement |
|---|---|
| Years in business | 3+ years preferred |
| Annual revenue | 2x proposed contract value |
| Credit references | 3 trade references |
| Bonding capacity | 2x proposed contract value |
| Banking reference | Active account |
Insurance
| Coverage | Minimum Limit |
|---|---|
| General Liability | $1,000,000 per occurrence |
| Aggregate | $2,000,000 |
| Auto Liability | $1,000,000 |
| Workers' Compensation | Statutory limits |
| Umbrella (large contracts) | $5,000,000 |
Safety
| Criteria | Requirement |
|---|---|
| EMR (Experience Mod Rate) | < 1.0 preferred, max 1.25 |
| TRIR (Total Recordable) | Below industry average |
| Written safety program | Required |
| OSHA violations | No willful/repeat (3 years) |
| Drug testing program | Required |
Experience
| Criteria | Requirement |
|---|---|
| Similar project experience | 3+ comparable projects |
| References | 3+ verifiable |
| Key personnel | Named and experienced |
| Capacity | Not over-committed |
| Geographic experience | Local or expandable |
Licensing & Legal
| Criteria | Requirement |
|---|---|
| Contractor license | Current, correct class |
| DIR registration | Current (public work) |
| Business license | Current |
| Legal history | No material judgments |
Prequalification Process
Step 1: Request Prequalification Package
Send to Potential Subcontractor:
- Prequalification questionnaire
- Insurance requirements
- Safety questionnaire
- Reference release form
Set Deadline:
- Typically 7-14 days
- Before bid deadline
Step 2: Review Submitted Information
Verify:
- All forms complete
- Insurance certificates obtained
- License verified (CSLB lookup)
- EMR letter obtained
- References provided
- Financial info (if required)
Step 3: Verification
Check References:
- Contact at least 3 references
- Ask specific questions
- Document responses
Verify License:
- CSLB.ca.gov (California)
- Correct classification
- Active status
- Workers' comp verified
Verify Insurance:
- Certificates match requirements
- Verify with carrier if needed
- Check A.M. Best rating
Verify Safety:
- EMR from insurance carrier
- OSHA violation history
- Safety program review
Step 4: Evaluation and Decision
Score Each Category:
| Category | Weight | Score (1-5) | Weighted |
|---|---|---|---|
| Financial | 25% | ||
| Insurance | 15% | ||
| Safety | 25% | ||
| Experience | 25% | ||
| References | 10% | ||
| TOTAL | 100% |
Decision Criteria:
- Score 4.0+: Approved
- Score 3.0-3.9: Conditional (review)
- Score < 3.0: Not approved
Step 5: Documentation
Maintain File:
- Completed questionnaire
- Insurance certificates
- License verification
- EMR letter
- Reference check notes
- Approval/denial decision
- Date qualified
Prequalification Questionnaire
================================================================
SUBCONTRACTOR PREQUALIFICATION QUESTIONNAIRE
================================================================
Date: ____________
SECTION 1: COMPANY INFORMATION
Legal Company Name: _________________________________________
DBA (if different): _________________________________________
Address: ____________________________________________________
City: ____________________ State: _____ ZIP: ______________
Phone: ____________________ Fax: __________________________
Website: ____________________________________________________
CONTACTS:
Primary Contact: ___________________ Title: ________________
Email: _________________________ Phone: ____________________
Accounting Contact: ________________ Title: ________________
Email: _________________________ Phone: ____________________
Type of Entity:
☐ Corporation ☐ LLC ☐ Partnership ☐ Sole Proprietor
State of Incorporation: ____________ Year: _________________
Years in Business: __________ Under Current Name: __________
Federal Tax ID: _____________________________________________
================================================================
SECTION 2: LICENSING
Contractor License #: _______________ State: _______________
License Classification(s): __________________________________
Expiration Date: ____________________________________________
DIR Registration # (if applicable): _________________________
Any disciplinary actions against license? ☐ Yes ☐ No
If yes, explain: ____________________________________________
================================================================
SECTION 3: BONDING
Bonding Company: ____________________________________________
Agent: _____________________________________________________
Phone: ____________________ Email: ________________________
Single Project Limit: $______________________________________
Aggregate Limit: $__________________________________________
Any claims against bonds in past 5 years? ☐ Yes ☐ No
If yes, explain: ____________________________________________
================================================================
SECTION 4: INSURANCE
Current Insurance Carrier: __________________________________
General Liability Limits: $____________ per occurrence
Aggregate: $_________________________________________________
Auto Liability: $____________________________________________
Workers' Compensation: ☐ Yes Carrier: ______________________
Professional Liability (if applicable): $_____________________
Umbrella: $__________________________________________________
================================================================
SECTION 5: SAFETY
Experience Modification Rate (EMR):
Current Year: ________ Prior Year: ________ 2 Years Ago: ________
Total Recordable Incident Rate (TRIR) - Past 3 Years:
Year 1: ________ Year 2: ________ Year 3: ________
Any OSHA citations in past 5 years? ☐ Yes ☐ No
If yes, explain: ____________________________________________
Do you have a written safety program? ☐ Yes ☐ No
Full-time safety professional on staff? ☐ Yes ☐ No
Do you conduct regular safety training? ☐ Yes ☐ No
Do you have a drug testing program? ☐ Yes ☐ No
================================================================
SECTION 6: FINANCIAL
Annual Revenue (most recent year): $__________________________
Annual Revenue (prior year): $________________________________
Number of Employees: _________________________________________
Bank Reference:
Bank Name: __________________________________________________
Contact: ____________________________________________________
Phone: ______________________________________________________
Trade References (minimum 3):
1. Company: _________________________________________________
Contact: ___________________ Phone: _____________________
2. Company: _________________________________________________
Contact: ___________________ Phone: _____________________
3. Company: _________________________________________________
Contact: ___________________ Phone: _____________________
================================================================
SECTION 7: EXPERIENCE
Primary Scope of Work: ______________________________________
Geographic Area Served: _____________________________________
Largest Project Completed (value): $__________________________
Current Backlog: $___________________________________________
List 3 comparable completed projects:
Project 1:
Name: _____________________________________________________
Owner/GC: _________________________________________________
Contact: ___________________ Phone: ______________________
Contract Value: $________________ Year: __________________
Description: ______________________________________________
Project 2:
Name: _____________________________________________________
Owner/GC: _________________________________________________
Contact: ___________________ Phone: ______________________
Contract Value: $________________ Year: __________________
Description: ______________________________________________
Project 3:
Name: _____________________________________________________
Owner/GC: _________________________________________________
Contact: ___________________ Phone: ______________________
Contract Value: $________________ Year: __________________
Description: ______________________________________________
================================================================
SECTION 8: LEGAL
Any lawsuits or arbitration in past 5 years? ☐ Yes ☐ No
If yes, explain: ____________________________________________
Any bankruptcy filings in past 10 years? ☐ Yes ☐ No
If yes, explain: ____________________________________________
Any liens filed against you in past 5 years? ☐ Yes ☐ No
If yes, explain: ____________________________________________
================================================================
CERTIFICATION
I certify that the information provided is true and accurate
to the best of my knowledge. I authorize verification of all
information provided and release of information to [Company].
Signature: __________________________________________________
Printed Name: _______________________________________________
Title: ______________________________________________________
Date: _______________________________________________________
================================================================
Reference Check Questions
Questions to Ask References:
- How long have you worked with this subcontractor?
- What type of work did they perform?
- What was the contract value?
- Did they complete on time?
- Did they stay within budget?
- How was the quality of work?
- Any safety incidents?
- How were they to work with?
- Any disputes or claims?
- Would you use them again?
Rate Each Answer: 1-5
Approved Subcontractor List
Maintaining the List:
- Update annually
- Re-qualify every 2-3 years
- Remove for performance issues
- Add new qualified subs
Information to Track:
- Company name and contact
- Approval date
- Expiration date
- Scope qualified for
- Insurance expiration
- Any restrictions
Related Documents
- Subcontract Agreement
- Insurance Requirements
- Safety Requirements
- Reference Check Form
Software Integration
CRM.Construction:
- Subcontractor database
- Prequalification tracking
- Document storage
- Expiration alerts
Template provided by support.construction. Customize with your company information.