A Simpler Way to Supplier, Contractor, and Vendor Prequalification

When done correctly, contractor prequalification will reduce company risk, employee stress, and confusion regarding safety expectations.

Working with suppliers or third-party contractors to improve business operations and capabilities has its advantages. It can also have drawbacks, often associated with increased exposure to risks.

Most companies have internal policies on how to choose which supplier to work with. However, the process often creates a significant workload, and overburdens the employees assigned to the task. An increasingly popular option is to work with a company dedicated to helping you prequalify your suppliers before they are hired to perform any work. This helps you decide not only which supplier is best qualified for the job but confirm that it can also do the job safely, while reducing the potential for an incident.

Incidents can happen. It’s human nature. However, knowing which suppliers adhere to training their employees and are more safety conscious than others, can certainly go a long way in keeping day-to-day operations running smoothly. Prequalifying suppliers is an essential tool in reducing risk and confirming which suppliers are the right ones for the job.

Benefits of Supplier PrequalificationBenefits of Supplier Prequalification

• Digital prequalification process and forms
• Centralized data for easy accessibility and reporting
• Knowing beforehand which suppliers meet your requirements
• Peace of mind the supplier you hire is qualified and safe to perform the work assigned
• Improved workflow
• Ensures suppliers understand what is required of them
• Reduced costs
• Improved safety culture
• Reduced administration burden from gathering paperwork

Companies that have multiple site locations benefit from having a set prequalification standard even if each site has different requirements. This helps reduce the stress felt by site managers because it eases the burden of determining which suppliers to work with. Benchmarks can be set at a base level and then each site can modify or add their own specific requirements for prequalification.

A prequalification process can be especially useful to contractors, suppliers, and vendors because it helps understand what is required to work with your company. It also helps contractors know you have a standard for safety and requires them to adhere to that standard as well. This can often help everyone feel safer while working on your site, especially if multiple suppliers are involved.

How to Choose a Supplier Prequalification Software

• Simple to Use. How simple and easily understood is the process? Do your contractors often hire third-party processing companies to help them get registered because the process is overly complicated?
• Understandable Requirements. The process should not be difficult. Contractors and vendors should easily understand what is required of them.
• Supplier Pricing. Are the prices reasonable to suppliers for the work performed by the prequalification company? Is it affordable for your smaller suppliers? Are there any registration or setup fees?
• Cost to the Client. What is the cost? Is there a setup fee? What if your needs do not require every service, are there price options available? Are the costs thousands – or in some cases – tens of thousands? (Honestly, that last is ridiculous if so).
• Customer and Client Support. How does the company treat your suppliers and are they genuine in their support efforts?
• Time Commitment. Is the process confusing or frustrating? How quick are the turn-times?
• Flexible Solutions. Does the qualification provider have a solution flexible to your unique needs or, do your needs need to fit into their box?
• Industry and Regulatory Language Support. (MSHA, OSHA, DOT, safety-sensitive, non-safety sensitive, etc.)
• Choose the Right Fit for You. It is highly recommended to not be persuaded by “compression”.

With contractor prequalification becoming an industry standard, EHS professionals often look for a program that will put the least amount of burden on their suppliers. While that is a legitimate concern, remember that just because others are using a service provider, doesn't mean it's the right one for you. It is not always recommended to choose a service provider simply because some of your suppliers are currently registered in their database: especially if there are better options available (aka don't get "compressed").

Be cautious of any supplier prequalification company that automatically increases their fees to the supplier whenever a new client registers a pre-existing supplier as one of their own. This is often a major complaint from contractors because they do not always know they are charged until they receive their credit card statement.

Be sure the prequalification service provider fits all your internal needs with customizable options but is also cost-effective and simple to navigate. There are actually third-party processing companies that exist because some qualification services are so overly complicated the suppliers need help to get through the process. This leads to frustration, confusion, and resentment and adds additional fees to the supplier – who in turn charges those fees back to the client.

Helpful Checklist: Is Your Supplier Prequalification Service Provider a Good Fit?

• Customizable contractor prequalification questionnaire to fit your needs
• Cost-effective for you, your suppliers, contractors, and vendors
• Minimal or no setup and registration fees
• Simple to navigate with easy-to-understand requirements
• Customer support for you, your suppliers, contractors, and vendors
• Exceptions available for suppliers that fall below the approval threshold
• Quick turn times for review and paperwork processing
• Internal note capabilities
• Document tracking and repository
• Embed or upload training videos
• Track certificates
• Set notifications for expiring training, documents, and insurance certificates
• Employee-level qualification and training

Supplier, contractor, vendor, and subcontractor prequalification should not be a difficult process. Some providers seem to be more focused on profits instead of focusing on helping you, your organization, and the suppliers that work for you. Do not allow your prequalification provider to treat your contractors with any sort of contempt. Your contractors should be viewed and treated as their customers and with a high degree of respect and support.

Contractor prequalification should help the process run smoother for all involved. If yours does not, it may be time to consider other services available.