The GTA Construction Report – June 2009 – PAGE A7
How do General Contractors select their sub trades?
Price is important, but is not the final issue (usually)
MARK BUCKSHON
Elements include: “Without that trust, the bids come too second bidder to determine who is most
– The GTA Construction News
How important is the sub trade to the late to analyze properly and a problem can desirable combination of all aspects in-
overall project? ensue after closing, when their is a misun- cluding specific personnel the trade is
How do general contractors decide on If the subcontractor’s role is minor and derstanding, hidden exclusion, scheduling going to put on the job”;
which sub trades and suppliers to use for would not jeopardize the project, the general problem or a pure ‘walkaway’ from a price.” * “Experience of the sub trade in the work
their projects? Do they have criteria and contractors may often be willing to take to be performed”;
rules of the game, and can sub trades learn more risk on a new player, or one which Price * “The subs are also sometimes deter-
from this information to improve their seems to have a really low price. The same Obviously, price is important. However, mined by specification pre-qualification
chances of success in winning profitable is not the same for the key sub trades. one contractor said: “The lowest bid is the of sub-trades”;
business? “The M and E, and perhaps five critical starting point, not the ending point.” * “Membership in a trade organization as
A questioner at the President’s Panel at trades, we make sure they can perform,” said a tender criteria”;
the Ontario General Contractors Association Frank DeCaria of Eastern Construction. “To Other observations * “Price is important, but it should not be
symposium asked: “What criteria do you give you one example, we were doing a Survey participants noted: the only consideration - nor should the
use in determining which sub trade to use?” project in Toronto . . . the decision was made * “It is a combination of all of the above. price be ‘shopped’ by the GC to obtain
Only one president, Frank DeCaria, from to carry a former contractor, with a signifi- Depends on all criteria as applied to the new pricing after tender close.”
Eastern Construction Company Ltd., re- cantly lower bid. (The contractor) couldn’t
ceived the opportunity from the session perform; he put us in a real bind.
moderator to reply, but we felt the question “It is better for us to take care of the $100
to be important enough to poll other general
Blunders and breaking in: The opportunities
grand . . . if we don’t get the job, it’s cheaper
contractors for responses. for us to keep two bodies in the back clean-
and challenges of selecting sub trades
To say the least, the response to our sur- ing stuff, then putting the company at jeop-
vey – even with direct help in distributing it ardy.”
from the OGCA office – lacked enough di-
Here is a selection of responses to our replace at our own cost.
versity to qualify for any statistical validity
survey questions about the selection “How many more examples do you
. Is there mutual trust (good previous
Only four people responded. W
process for sub trades by general contrac- want?
e invited working experience?)
other panellists at the OGCA Symposium to
tors:
“The sub trades that we value the most
respond as well; only Doug Burnside of
A sub trade you’ve never used wants
are those with whom we share mutual trust,”
Dolyn Developments in Ottawa answered.
What is the biggest sub trade selec- to bid on a project for you. How/when
says Doug Burnside of Dolyn Developments
Nevertheless, despite the limited re-
tion blunder that you can recall, and would you give the sub an opportunity
in Ottawa. “They will provide their quote
sponse, we can still piece together some in-
what did you learn from the experi- to break in? (You can cite your expe-
early enough that we can analyze it and dis-
sights which may be helpful in explaining
ence? riences to answer this question.)
cuss it with them. In turn, they can fully ex-
the decision-making of general contractors. pect that their price will not be shopped to
First response: First response:
other firms.
“Hire someone you don’t know be- “Pre-qualification statement required
cause they are the apparent low bidder, for sub guard as first step in the process.”
but (they) can’t do the job, so in the end,
cost way more than if we have selected Second response:
the fifth bidder. “It would depend on the trade in-
“The lowest bidder is only the starting volved, and the project. I usually prefer
point – not the ending point.” to have some knowledge of the sub trade
before carrying them at closing. I don’t
Second response: mean that I have to have worked with
“We have been caught on more than them before but I need some level of
one occasion with carrying a sub trade comfort that they have been pricing my
that quotes as per plans and specs and work consistently and that their pricing
after the fact comes back with the ‘I has been realistic. The last thing we need
didn’t include for that . . .’ but you end up is an unknown sub trade to come in with
stuck dealing with them or else having to a low price then back away when they
swallow the difference to the next price.” think they are too low or incomplete in
their scope.”
Third response:
“Assuming that they would live up to Third response:
their reputation. Now I must have our “I would ask for example projects with
project manager QC them with a check- references. I would be looking for insur-
list.” ance, CVs, references, and promotional
material to ensure to me they are a pro-
Fourth response: fessional outfit.”
“We did not check the scope of work
clearly and the wrong sub was selected. Fourth response:
The sub that bid according to specifica- “They should submit a CCDC11 prior
tion lost a job and important work for to bidding and the GC should determine
their staff to stay in business. if they are qualified after meeting with
“We carried a sub trade price based them and understanding their resources
upon an unspecified alternative material and their ability to fulfill their financial
and got caught. Had to pay for the spec- and guarantee provisions for the work to
ified material to be used by another sub- be performed.
contractor. “The GC should not accept unsolicited
“We carried a sub who was not pre- bids from anyone and everyone.
qualified and were forced to use a pre- “GCs should pre qualify their sub
qualified sub at a cost premium. trades annually and they should not use
“We supplied substandard materials to the unsolicited bids of unqualified firms
a subcontractor to install which resulted to beat-up on qualified trades and mate-
in a poor finished product that we had to rials suppliers.”
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