Even the most well-connected real estate project managers and property managers find themselves in need of new vendors for their capital and construction projects from time to time. In addition to the savings that competitive bidding practices deliver, owners have to meet the demands of expanding portfolios, new building technologies and stiff industry competition.
Vendor management is an art that requires excellent planning and negotiating skills, along with a good dose of emotional intelligence. It also involves a degree of risk that many owners are understandably eager to avoid. It’s difficult to know from afar which vendors are capable of delivering your projects on time and on budget.
Rolling out a standardized vendor qualification process across your portfolio can go a long way to ensuring your prospective service provider is worthy of bidding on your projects. Aside from demonstrating technical competence and a good attitude, vendors need prove that they have financial stability, relevant experience, and sufficient licensing and insurance before they ever see an RFP.
Once you’ve found a vendor who you think is worth getting to know, make sure you collect the following information:
• Copy of W-9
• List of company license numbers
• List of state sales tax numbers
• List of state unemployment insurance numbers
• List of insurance agreements
• List of current projects
• List of recently completed projects
• Current financial statement
• Bank information
• Dun and Bradstreet information
• Surety information
• References from three suppliers
• References from three contractors
• Independent verification letter supporting Experience Modification Rate for the last three years
To help keep this process organized, we’ve created a downloadable Vendor Qualification Template that you can use across your portfolio to make sure all of your teams are getting a complete picture of prospective vendors.
Your construction vendors are some of your most important partners in helping you execute on your real estate organization’s vision. It’s important to dig deep into their qualifications and get multiple data points that demonstrate their suitability before you enter into any relationship with them.