How Do You Prequalify a Subcontractor?

By Wyatt Cooper · Published October 22, 2026 · 7 min read

Key takeaways

Prequalification decides, before the invitation, whether a subcontractor can perform a job of a given size; the paperwork collected after award is a separate step.
Ask every sub for the same questionnaire: license, experience, backlog, finances, bonding, insurance, safety record, references and key people.
Turn the answers into a single-job dollar limit, so the bid list says not just who is approved but for how much.
Re-check approved subs every year and after any job that went badly, and keep the reason for each decision.

To prequalify a subcontractor, send every sub the same questionnaire before you invite it to bid: license, years in the trade, similar projects with references, current backlog and largest job, financial statements or a bank reference, bonding capacity from its surety, insurance limits and its safety record. Check the answers, call the references, and approve the sub up to a single-job dollar limit set by a written policy, so the bid list shows who can take a job of this size.

Prequalification is the decision before the invitation

A low bid from a sub that cannot finish the work is the most expensive number on a bid day. Prequalification is how a general contractor avoids receiving one: it decides in advance which subcontractors may be invited to bid which size of job. It is different from the compliance paperwork collected after award (the certificate of insurance, W-9 and lien waivers), which proves the sub is set up to work on this job. Prequalification asks whether it should be bidding at all.

The federal government's test of a responsible contractor is a good outline for the questionnaire. A prospective contractor must have adequate financial resources, be able to meet the schedule "taking into consideration all existing commercial and governmental business commitments", have a satisfactory performance record and a satisfactory record of integrity and business ethics, and have the necessary organization, experience and technical skills, and equipment and facilities, or the ability to obtain them (FAR 9.104-1). A private GC is not bound by it, but each of those is a question you can ask a sub.

What to ask for

A subcontractor prequalification questionnaire: what to ask for and what each answer tells you
Item	What to ask for	What it tells you
Company and license	Legal name, years in business, owners, the trade license number and state	Who you would be contracting with, and that it may legally do the work
Experience	Five recent jobs of similar type and size, with contract value, GC and a contact	Whether it has built this before, at this size
Largest job and backlog	Largest contract completed in the last five years; the value of work under contract and not yet done	How big a job it has handled, and how much room it has now
Finances	Reviewed or audited statements for two years, or a bank reference and a line of credit	Whether it can carry payroll and materials while waiting to be paid
Bonding	A letter from its surety stating single-job and aggregate capacity	A third party's view of its financial strength
Insurance	A sample certificate with current limits for general liability, auto, workers' compensation and umbrella	Whether its limits meet your subcontract before you rely on its bid
Safety record	Its written safety program and, if it keeps them, its OSHA 300A summaries for three years	Recordable injuries and hours worked, year by year
Key people	The project manager and foreman it would assign, and their experience	Who will actually run your job
Disputes	Claims, liens, terminations and lawsuits in five years, and how each ended	How it behaves when a job goes wrong

On the safety line, know what a small sub may lawfully not have. A company that had 10 or fewer employees at all times during the last calendar year does not need to keep OSHA injury and illness records unless OSHA or the Bureau of Labor Statistics tells it in writing to (29 CFR 1904.1). Larger employers keep the OSHA 300 Log, and at the end of each year must create, certify and post an annual summary that includes the annual average number of employees and the total hours worked; it is posted no later than February 1 and kept up until April 30 (29 CFR 1904.32). Ask for the 300A, and accept a written safety program and references from a sub too small to keep one.

Set a single-job limit from a written policy

An approved or not-approved answer is too blunt: a drywall sub that runs $400,000 jobs well may be the wrong choice for a $3,000,000 one. Write a short policy that turns the answers into a single-job limit, apply it the same way to every sub in a trade, and record the limit on the bid list. The policy is yours to set; the one in the example below is fictional and only shows the method.

Prequalification: Brightwater Mechanical (fictional), November

Policy (fictional): Single-job limit = the lower of 1.25 × largest completed job and the surety's single-job limit, rounded down to the nearest $100,000; and the surety's aggregate limit less current backlog must cover that limit.
Largest completed job: $1,850,000 (medical office, 2025); 1.25 × $1,850,000 = $2,312,500
Surety letter: Single job $2,500,000; aggregate $8,000,000
Backlog: $4,200,000 under contract and not yet done; aggregate room $8,000,000 − $4,200,000 = $3,800,000
Insurance: General liability $1,000,000 per occurrence, $2,000,000 aggregate; umbrella $5,000,000; meets the subcontract exhibit
Safety: Written program received; 300A summaries for three years received; recordable cases and hours reviewed with no concerns
References: Three GCs called: two strong, one noted slow closeout paperwork
Decision: Approved for mechanical bids up to $2,300,000 per job (the lower figure, $2,312,500, rounded down; aggregate room of $3,800,000 covers it). Re-check in 12 months.

A prequalification decision for a fictional mechanical subcontractor, under a fictional GC policy

The arithmetic is deliberately simple so anyone on the team can redo it. The judgment sits in the reference calls and the safety review, which is why each gets a written line.

Run it before the invitation goes out

1GC estimatorSends the same questionnaire to every new sub in the trade
2SubcontractorReturns the questionnaire, surety letter, sample certificate and safety summaries
3GCChecks the license, calls references, reviews finances and safety
4GCApplies the policy and records a single-job limit and a re-check date
5GC estimatorInvites the sub only to jobs within its limit

Prequalifying a subcontractor, from request to the bid list

Do it ahead of bid season, not the week an invitation to bid is due out. A sub prequalified in a rush is a sub prequalified on its word. On bid day, the limit is one more line to read beside the number when you level the bids.

Keep the list current

Re-check every approved sub once a year: new financials or bank reference, a fresh surety letter, the latest 300A.
Re-check after any job that went badly, and write down what happened while the facts are fresh.
Lower a limit when backlog jumps; a sub with a full year of work may not have the crews for yours.
Tell a sub why it was not approved or what limit it has. Most will fix what they can, and you widen your coverage.
Keep financial statements confidential and limited to the people who decide.

The sub's side of this, getting onto a GC's list in the first place, is in how a subcontractor gets on a GC's bid list. For where prequalification sits in the GC's year, see the general contractor's guide.

The bottom line

Prequalification is a questionnaire, a few phone calls and a written policy that turns the answers into a dollar limit. It is cheap compared with replacing a sub halfway through a job.

Ask every sub for the same things, apply the same policy, write down the reason, and check again every year.

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Sources

FAR 9.104-1, General standards (contractor responsibility) — Acquisition.gov, U.S. General Services Administration. Read October 22, 2026.
29 CFR 1904.1, Partial exemption for employers with 10 or fewer employees — eCFR, Office of the Federal Register. Read October 22, 2026.
29 CFR 1904.32, Annual summary — eCFR, Office of the Federal Register. Read October 22, 2026.

Questions

What is subcontractor prequalification?

It is a general contractor's check, before inviting a subcontractor to bid, that the sub can perform a job of a given size: its license, experience, backlog, finances, bonding, insurance, safety record and references. The result is usually an approval up to a single-job dollar limit.

What should a subcontractor prequalification form include?

Company details and license, recent similar projects with contacts, largest completed job and current backlog, financial statements or a bank reference, a surety letter with single-job and aggregate bonding capacity, a sample certificate of insurance, a written safety program and OSHA 300A summaries if the sub keeps them, key people, and any claims or terminations.

Can a small subcontractor without OSHA logs be prequalified?

Yes. A company with 10 or fewer employees at all times during the last calendar year generally does not have to keep OSHA injury and illness records under 29 CFR 1904.1. Ask for its written safety program and references instead.

How often should you prequalify subcontractors?

Once before the first invitation, then every year, and again after any job that went badly or when the sub's backlog or bonding changes a lot.

Is prequalification the same as collecting a certificate of insurance?

No. Prequalification decides whether a sub may bid. The certificate of insurance, W-9 and similar documents are collected after award to show the sub is set up to work on that job.