Contracts & Buyout

Prequalification

Also known as: Prequal

Vetting a subcontractor's financial health, safety record, capacity, and experience before letting them bid or awarding work.

Prequalification is the screening a general contractor does before trusting a subcontractor with a scope — reviewing their financials, bonding capacity, safety record (EMR), references, and relevant experience. It answers a simple question: can this sub actually deliver this work without putting the job at risk?

Good prequalification prevents the most expensive buyout mistake: awarding to a low bidder who then defaults, walks off, or can't staff the work. It's the risk-management front end of buyout.

Related terms

Buyout

The process of soliciting, leveling, and awarding subcontracts and purchase orders to turn a budget into signed contracts.

Bid Leveling

Normalizing competing subcontractor bids so you're comparing identical scope, not just headline numbers.

Commitment

A subcontract or purchase order — a signed agreement committing money to a subcontractor or supplier for a defined scope.

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