The Costly Risk of Choosing the Wrong Subcontractor and How to Avoid It

When a project is on the line, selecting the wrong subcontractor can do more than just inflate your costs; it can derail timelines, damage reputations, and cause long-term financial headaches. Unfortunately, some general contractors make decisions based on incomplete or misleading bids, missing the bigger picture.

Good decisions require good data. Your preconstruction software should have tools to help mitigate those risks such as Bid Leveling, Bid Tabulation, and Prequalification Software which are designed to take the guesswork out of subcontractor selection and make data driven decisions that will help you build with confidence.

What Can Go Wrong?

Hiring an unqualified or unreliable subcontractor introduces serious risks, including:

• Cost overruns due to poor estimates or scope gaps
• Project delays from missed deadlines, staffing issues or leaving items out of their bid
• Quality control issues leading to rework and inspection failures
• Legal and compliance risks from uninsured or non-compliant subs
• Damage to relationships with owners and stakeholders

Often, these issues stem from choosing a sub based solely on the lowest number without a clear understanding of what’s included, excluded, or if the company is even qualified for the job.

How Bid Leveling & Bid Tabulation Help

Bid Leveling allows you to compare apples to apples, not just numbers. It standardizes the way bids are presented so you can:

• Identify scope gaps or exclusions
• Compare labor, materials, and allowances side-by-side
• Spot unusually low bids that may signal inexperience or missed items

Bid Tabulation compiles all submitted bids into one unified view, making it easier to:

• Evaluate competitiveness
• See which trades are over or under budget
• Make informed decisions faster

Bid Leveling and Bid Tabulation tools reduce manual error and streamline your decision-making process especially when time is tight.

Why Prequalification Matters

Even a well-priced, complete bid means little if the subcontractor can’t perform.

Prequalification software ensures you're selecting from a trusted pool of subcontractors by tracking:

• Licensing & insurance compliance
• Safety records and EMR rates
• Financial strength and bonding capacity
• Project history and performance reviews

With PreconSuite, you can automate prequalification workflows to mimic your own business workflows, request documents, and maintain an up-to-date subcontractor database. You also have the ability to rate your subcontractors based on your company standards and not based on other general contractors' experience with them.

Another benefit of using PreconSuite is you own and control your own database. If you find that the information you have on a sub in your database needs to be updated, you can do that yourself and not have to rely on a third party to make changes. Data can be changed immediately through our in-line editing feature and bid invitations can be re-sent in 2 clicks.

Build Smarter

Choosing the right subcontractor is just as important as choosing the right preconstruction software. Build smarter with software tools that allow you to:

• Easily compare bids
• Create scopes specific to each trade partner
• Work only with prequalified subcontractors
• Reduce risk
• Control your own data

Let PreconSuite help you build smarter, safer, and more profitably. Schedule a demo today!