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Subcontractor prequalification scorecard

Assess a subcontractor against knockout requirements and a weighted scorecard across safety, capability, financial standing, quality and conduct. Exports a signed-off record with the document checklist.

Knockouts are not points. Six requirements sit outside the score. Fail one and the assessment fails, however good the rest looks. Most scorecards weight everything, which is how a strong safety record ends up buying off an expired certificate of currency.

1. Who is being assessed

Subcontractor

ABN

Trade / package

Assessed by

Date

Review due

2. Knockout requirements

Current workers compensation policy covering all workers on site

Including working directors where the scheme requires separate cover

Current public and products liability policy at or above your required limit

Check the limit, the expiry, and that the insured entity matches the contracting entity

Contracting entity name and ABN match the insurance certificates

The most common failure. The quote comes from a trading name, the policy names a different company

Trade licences current for every jurisdiction the work is performed in

Licences are state-based and do not travel

Professional indemnity held where the subcontractor carries any design responsibility

Only applies where they design, but if they do, public liability will not respond

No undisclosed insolvency event, deregistration or director banning

Check the entity and the directors, not just the entity

6 knockouts not yet answered.

3. Financial concentration

Package value

Their annual turnover

Your concentration limit %

A common commercial rule of thumb is to keep a single package below a quarter of a subcontractor's annual turnover. It is a rule of thumb, not a standard. Set your own number.

4, Safety

Weight%

Documented WHS management system appropriate to the work

SWMS produced for high risk construction work without being chased

Incident history disclosed, including notifiable incidents and any regulator notices

Workers hold the tickets the work requires and records are current

Evidence of supervision on site, not just a nominated supervisor on paper

Track record of participating in inductions, toolbox talks and site rules

5, Capability and capacity

Weight%

Demonstrated experience on projects of comparable scale and complexity

Workforce and plant sufficient for the package alongside their current commitments

Named supervisor or project contact with relevant experience

Realistic programme provided, not simply an acceptance of yours

Second and third tier subcontracting disclosed and controlled

6, Financial standing

Weight%

Package value sits within a reasonable proportion of annual turnover

Payment terms to their own suppliers and workers appear to be met

Willing to provide financial information or a bank or trade reference

No pattern of payment claims, adjudications or disputes against them

7, Quality

Weight%

ITPs and checklists produced as part of the work, not as an afterthought

Defect and rework history on previous projects is acceptable

Provides as-builts, warranties and O&M documentation without prompting

Handles nonconformances constructively rather than defensively

8, Administration and conduct

Weight%

Responds to RFIs, variations and correspondence within reasonable time

Payment claims arrive correctly formatted and on time

Referees contacted and their feedback is positive

Prepared to work to your systems rather than only their own

Outcome

Assessment incomplete

Score the criteria to produce a result.

Prequalification expires quietly

The failure mode is not a bad assessment. It is a good one that nobody revisited. Insurance lapses on its own schedule, licences renew on another, and a subcontractor who was sound two years ago may now be carrying three jobs they cannot staff.

Diarise against the earliest insurance expiry, not the annual review date. Cover almost always lapses first, and an uninsured subcontractor on site is a problem that belongs to the head contractor long before it belongs to them.

This scorecard records your own assessment. It asserts no insurance limits, licence classes or financial thresholds. Required cover varies by builder, principal, contract and trade, so set your own and verify every certificate of currency directly with the insurer or broker rather than accepting a copy. Prequalification does not transfer liability and does not replace the checks your contract or your insurer requires.

What prequalification is for

Prequalification is the decision about whether a subcontractor should be allowed to tender at all, made before anyone is under time pressure. It is deliberately separated from the tender assessment, because the two decisions pull in opposite directions: prequalification asks whether this business can safely and reliably do the work, and tender assessment asks what they will charge.

Combine them and price wins, every time. A subcontractor with no current workers compensation cover and the sharpest number in the field will be argued into the job by someone who needs the package let this week.

The point of doing it in advance is that the answer is already on file when the pressure arrives.

Why knockouts are not points

Most prequalification scorecards weight everything. Insurance is worth some points, safety is worth some points, capability is worth some points, and a total emerges. This is the wrong shape for the problem, because it lets a strong performance in one area compensate for a disqualifying failure in another.

A subcontractor with an excellent safety record and no workers compensation policy does not score slightly lower. They are not eligible, and no amount of good performance elsewhere changes that. The same is true of an expired licence, a mismatch between the insured entity and the contracting entity, and an undisclosed insolvency event.

This scorecard puts those requirements outside the weighting entirely. Fail one and the assessment fails, and the tool names which one, so the conversation with the subcontractor is about a specific fixable thing rather than about a number.

The failure that catches everyone: entity mismatch

The single most common prequalification defect is not a missing certificate. It is a certificate that covers a different legal entity from the one that will sign the subcontract.

It happens innocently. The quote comes in under a trading name. The insurance was arranged years ago in the name of the original company. A restructure created a new entity for the operating business and nobody updated the broker. Each step is unremarkable and the result is a subcontract with a company that has no cover.

Check the ABN on the certificate of currency against the ABN on the subcontract, every time, and verify the certificate with the insurer or broker rather than accepting a scanned copy. A forged or expired certificate of currency looks exactly like a current one.

Concentration risk, and why it is a rule of thumb

A widely used commercial guideline is to keep any single package below roughly a quarter of a subcontractor’s annual turnover. The logic is straightforward: if this job is most of their year, then their survival and your programme are the same problem, and any disruption on their side becomes yours immediately.

It is a rule of thumb, not a standard, and it is easy to apply badly. A subcontractor for whom the package is forty per cent of turnover may be perfectly sound if they are growing, well-capitalised and have said so. One at fifteen per cent may be in trouble for reasons the ratio cannot see.

The tool asks for your own limit rather than imposing one, and treats exceeding it as a prompt to look harder at their other commitments and cash position, not as a disqualification.

Prequalification expires quietly

The common failure is not a bad assessment. It is a good assessment that nobody revisited. Approval gets recorded, the subcontractor goes into the system, and two years later they are on site under a status that was accurate when it was granted.

Insurance lapses on its own schedule. Licences renew on another. A subcontractor who was well-resourced last year may now be carrying three jobs they cannot staff, and nothing about that shows up until the programme slips.

Set the diary reminder against the earliest insurance expiry rather than the annual review date. Cover almost always lapses first, and an uninsured subcontractor on site is a problem that belongs to the head contractor long before it belongs to them.

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