Risk Management
Pre-Qualification Statements A Cornerstone of Risk Management
You may be aware CBG’s Risk Department has four primary areas of responsibility: Pre-qualifications, Contracts, Insurance/Bonds, and Compliance. Today, we’ll take a quick dive into the first point of contact with any customer (and their own risk evaluation): Pre-qualifications, where we present ourselves to customers in an effort to prove hiring CBG for the work is the least risky option in an inherently risky business. Before CBG, or any division is awarded work, and often even before being invited to bid, our customers routinely “invite” us to pre-qualify - to demonstrate we’ll be able to perform (and pay for) our part in a given project. A range of factors are considered, from financial strength and employee count, to recently completed projects and current backlog. The more sophisticated the customer, the more detailed the request. What’s interesting and important to note, is that different customers look for different considerations and they’re often at odds; Whiting Turner wants a “corporate view,” while a more local GC only wants branch specifics for the branch they hope to hire. WT likes to see 2000+ employees, while a local customer might avoid us for that reason. It’s not just employee count... the same considerations/contradictions exist for other areas as well, including backlog, work experience/ type, and more. Pre-qualification is not a cut and paste process. It requires knowledge of not only our industry and our work, but our branches – our people – and how to help them put their best face forward. It’s worth mentioning that for our customers, the pre-qualification of subcontractors is a cornerstone of their risk management. Along with the contract language and internal loss control, it evaluates and/ or controls the risk inherent in every project. As mentioned above, the data we provide tells them if we can afford to pay for product and work before getting paid ourselves. It shows if we are too busy (backlog too big), or not busy enough (speaks to ability and financial strength), etc. Unless we can satisfy their various and varying criteria, the
customer is going elsewhere. Only by understanding the context of the questions (work history, branch scope, customer size, project requirements, etc.) are we able to provide the answers they want to hear which allows us to successfully overcome those hurdles and continue to get more work. I’m biased, but I believe our Risk team does that quite well, and our current backlog tells the same story! Several readers will have performed this task in prior lives – completing pre-qualifications – for their branch or former company. Due to the sensitivity of some information often shared in the process, CBG finds it convenient to centralize the process. While it’s not wash, rinse, repeat, the same type of questions appear over and over again, so familiarity with the answers speeds processing and creates consistent results. We appreciate your patience with the timing involved, and your help in staying current on your branch-specific information. When submitting Pre-qualification requests, please remember to share any customer log-in information you’ve been provided to make the process more efficient. Fewer follow ups equals time saved. Finally, in the next few weeks, each branch will get a 6-month survey from Prequalifications@CookandBoardman.com. Please complete it timely and accurately so we can continue our work and update our information. In the next issue, we’ll dive a little deeper into contracts. Thanks for your time! Craig LaMontagne Director of Risk Management
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