Since its founding in 2021, Tough Leaf has vetted over 67,000 small and diverse firms, helping general contractors meet participation goals on their construction projects. With extensive experience evaluating certified small, local, and diverse subcontractors, we’ve learned the best practices for identifying the right partners. The key strategies remain the same whether you're looking for certified WBE, SBE, MBE, SDVOB, or DBE firms.
To share these insights, we spoke with Haley Winchester, Tough Leaf’s Head of Customer Success, who has a unique perspective on both client requirements and subcontractor needs. In this interview, she provides valuable advice for general contractors on vetting small and diverse firms.
Common Challenges in Vetting Subcontractors
Tough Leaf: What do you hear most often from general contractors about vetting small and diverse firms?
Haley Winchester: Vetting subcontractors is crucial, but it's also a highly time-consuming process. This becomes even more challenging when contractors are on tight deadlines for competitively bid projects. On average, it takes about 400 hours to identify, vet, contact, and secure all the bids from subcontractors for a large construction project.
Vetting these firms requires evaluating several factors. Contractors must assess the subcontractor’s experience, licensing, certifications, and insurance coverage, with capacity being a top priority. They also need to evaluate the firm’s financial stability, safety records, references, past projects, and workforce qualifications.
You also need to confirm that their workforce is trained and certified for the job at hand. This includes reviewing contracts, legal compliance, background checks, and even communication skills—ensuring they’re responsive and have the right project management systems in place. All these factors help determine whether a subcontractor is truly ready to be awarded the contract. It’s not just about selecting the lowest bidder.
Tip #1: Thoroughly Evaluate Subcontractor Qualifications
The Risks of Choosing Based on Price Alone
Tough Leaf: If general contractors only focus on price, can it end up costing them more?
Haley Winchester: Definitely. Focusing only on the lowest bid can lead to problems with quality or issues with payroll. For example, some subcontractors may have a history of payroll discrepancies, which creates compliance issues with the contractor’s client. Even though the client has paid for the work, the workers may not have been compensated. Thorough vetting and accurate evaluations can prevent these issues, ensuring you make the best choice for your project’s success.
Tip #2: Look Beyond Price
The Hidden Challenges of Vetting Subcontractors During Prequalification
Tough Leaf: What hidden challenges do general contractors face in vetting small and diverse firms?
Haley Winchester: One of the challenges we see is that during the bidding phase, many subcontractors are hesitant to go through an extensive prequalification process. It’s usually because they’re unsure if they even meet the job requirements or have a real chance of winning the bid. The uncertainty makes them reluctant to invest time in the process upfront.
As a result, general contractors often struggle to get the necessary documentation from subcontractors in a timely manner.
How Tough Leaf Simplifies Subcontractor Vetting for General Contractors
Tough Leaf: How does Tough Leaf assist general contractors with vetting during the bidding process?
Haley Winchester: General contractors face a dual challenge: they must find subcontractors who meet project requirements while also ensuring they receive bids in time to meet project deadlines. Tough Leaf streamlines the vetting process by leveraging our existing data on small and diverse subcontractors. We already know which subcontractors meet the specific project requirements, so we can quickly identify and vet them before bids are even submitted.
Once they are shortlisted, subcontractors feel more confident in completing the prequalification process, knowing they have a strong chance of winning the contract. As a result, general contractors receive a fully compliant and qualified pool of candidates, making it easier to meet deadlines without sacrificing quality or compliance.
Tip #3: Streamline vetting to reduce subcontractor hesitation to bid
Minimizing Work for General Contractors
Tough Leaf: It sounds like you’re taking on a lot of the heavy lifting for general contractors!
Haley Winchester: Exactly! We’re reducing the workload for general contractors during a crucial stage and speeding up the process. We gather all necessary documentation during the bidding stage. As soon as we contact a subcontractor, we request the necessary documents—NDAs, COIs, and more—so we’re fully prepared.
Tip #4: Request documentation before bids
Setting Subcontractors Up for Success
Tough Leaf: Do you start collecting documents as soon as a subcontractor signals interest in the project?
Haley Winchester: Yes, we immediately notify the subcontractor of the documents we need. This early communication helps us identify which subcontractors are serious about submitting bids.
Tough Leaf: So, by the time the prequalification phase arrives, the subcontractor is already set up for success?
Haley Winchester: Absolutely. We ensure that by the time general contractors are ready to award a package, the subcontractor has met all prequalification requirements.
Tip #5: Engage subcontractors through early communication
Find out how Tough Leaf can assist your team with finding the right subcontractors for your projects. Book a demo today.