Contractor Questionnaires Best Practices

The Critical Few

One interpretation of Pareto’s Law says that most of the value (80%) in any system originate from a critical few (20%) inputs. Or put another way, focus on the critical few inputs that produce most of the results you are looking for.

Contractor Databases and the Critical 20%

The critical few phenomena proves true for contractor management systems. More than fifteen years of database operations indicate that more than 60% of purchaser page views of contractor questionnaires are in only three subject-matter areas.

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1

Health & Safety Statistics

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Workers Compensation Metrics

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Regulatory Compliance

This means that purchasers typically use a very small data set when prequalifying or selecting contractors (presuming price and technical capability are even). Purchasers generally prequalify contractors on these three data points:

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1

Total Recordable Frequency and DART Rate

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Experience Modification Rate & Performance Index

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3

Regulatory Inspections, Citations & Orders

Business Considerations

Contractors have limited resources and motivation to complete lengthy questionnaires or get encumbered by a complex technology at the first contact stage of a business relationship. Further, 80% of general contractor survey respondents cite lack of resources and the imposition of costs on their subcontractors as the major reason for maintaining a manual prequalification process. Einstein is credited with the phrase ’Everything should be made a simple as possible, but not simpler’. Combining the Law of the Critical Few with Einstein’s simplicity message is good guidance for contractor questionnaire content.

Contractors have limited resources and motivation to complete lengthy prequalification questionnaires or get encumbered by complex technological solutions.

Post-hire due diligence assurance is critical when business conditions are not amenable to pre-screening.

80% of survey respondents cite lack of subcontractor resources and costs to subcontractors as the major reasons for maintaining a manual prequalification process.

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