Why Project Managers Shouldn’t Undermine the Prequalification Process

 

Let’s be honest: we’ve all done it. You know a guy. He helped you out last time. His number is tight and you’ve got budget or schedule pressure. So, you tell preconstruction and finance, “We’re fine with this one—let’s just move forward.” But finance raises a red flag: “This guy hasn’t passed prequalification.”

So, you go to bat for him. You push past the system. You vouch for him.

Then the job starts. Three months in, he’s missing crew. His invoices don’t match progress. His paperwork is late. Material deliveries stop showing up. And just like that, you’re the one holding the bag.

When that sub becomes a management problem, or worse, defaults halfway through the project and you’re the one holding the bag, that shortcut stops feeling smart.

The prequalification process isn’t a bureaucratic box-check—it’s a risk filter. It protects your project by confirming a sub has the financial stability, backlog capacity, safety record, and operational structure to perform. When Preconstruction or PMs ignore or override that process, they expose the project—and the company—to unnecessary risk.

 

 

Prequalification Isn’t Bureaucracy—It’s a Safety Net

It’s easy to view prequalification as red tape—something that slows down progress and keeps you from getting the subs you want. But that mindset misses the bigger picture. The prequalification process is your project’s first line of defense against risk.

It’s not about checking boxes. It’s about asking the hard, necessary questions before contracts are signed:

  • Is this subcontractor financially stable?
  • Do they have the bonding and insurance capacity to cover the scope?
  • Can they staff the work with qualified, consistent labor?
  • Are they carrying too much backlog already?
  • Have they had legal or safety issues that could resurface?

When preconconstruction or finance flags a subcontractor, it’s not to make your life harder. It’s because the numbers, history, or documentation don’t support trust. And if you override that, you're not just stepping over a policy—you’re stepping into liability.

 

When PMs Override the Process, They Own the Risk

Here’s what most Project Managers (PMs) don’t think about in the moment: when you push a subcontractor through prequalification and it goes bad, your name is on the file. When the finance team, legal counsel, or executive team investigates a default or major issue, the first thing they look at is how that sub got approved.

If there’s an email, meeting note, or phone call where you said, “He’s good. Let’s move forward anyway,” then you’ve personally assumed the risk. It’s your credibility on the line. That’s a heavy price for saving a few days on buyout.

 

You Can Still Be Proactive—Without Skipping the System

This isn’t about being powerless or blindly accepting every “no.” A strong PM doesn’t just follow process—they work within it to find smart solutions. (Read that last sentence again)

If you’ve got a subcontractor you believe in, but prequalification has concerns, there are ways to move forward strategically, without ignoring the risk.

Here’s how to do it right:

1. Make Prequalification Non-Negotiable

Start with a simple personal rule: If a subcontractor hasn’t passed prequalification, they don’t start work. That line keeps you in the clear and sends a strong message to your team that process matters. Don’t let emotional ties or deadline pressure push you to take unnecessary risk.

 

2. Engage Preconstruction and Finance Early

Don’t wait for a “no” to hit your inbox. If you’re planning to use a subcontractor with a questionable profile, bring preconstruction and finance into the conversation early. Ask: What are the specific concerns? Maybe it's financial, maybe backlog, maybe safety. Knowing the “why” lets you problem-solve with facts, not just faith.

 

3. Structure the Risk—Don’t Ignore It

If the subcontractor is borderline but still promising, consider mitigation strategies:

  • Require a payment and performance bond.
  • Break up their scope into smaller packages with milestone-based progress payments.
  • Increase retainage or withhold material deposits until work is verified.
  • Require joint checks to key suppliers or pre-pay for critical materials through the GC.

These moves protect your job and give the subcontractor a path forward—without putting your team or company at risk.

 

4. Use Your Influence to Strengthen the System, Not Work Around It

As a PM, you carry a lot of weight in the organization. How you use that influence matters. When you support prequal, advocate for smart controls, and push for transparency, you elevate the standard for everyone. It builds trust across departments—and that trust pays off when things get tough.

 

The Bigger Picture: Risk Management Is Part of the Job

We’re all in this business to build. But in today’s environment—tight margins, labor shortages, volatile materials—risk management is a core part of delivering a successful project. It’s not a side task for finance or legal. It’s your responsibility as a leader in the field.

Yes, relationships matter. Yes, we all want to get to work. But none of that is worth derailing a project over a subcontractor default who should’ve been flagged from the start.

Don’t let your instincts override your intelligence. Trust the process, respect the roles of the teams around you, and be a partner in risk management—not a wildcard. It’s not about saying “no” to subcontractors—it’s about saying “yes” to the right ones, the right way.

 

 

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